Japan is falling behind countries like Korea, Taiwan and the U.S.A. in producing low cost Dynamic Random Access Memory (DRAM) chips for personal computers says a recent report on the Japanese semiconductor industry.
The report was written by Takashi Yunogami from the Institute for Technology, Enterprise and Competitiveness (ITEC) at Doshisha University. Yunogami found that the current predicament facing the Japanese semiconductor industry is rooted in the history of computer chips and the failure of Japanese industry to meet with changing demands.
When Japanese semiconductor manufacturers started making computer chips in the 1970s, the chips were produced for use in large mainframe systems and were required to be of the highest possible quality. Around this need for quality developed a culture of extreme technological perfection. This resulted in Japan becoming the world leader in the DRAM market in the 1980s. A fundamental shift in the market occurred through the 1990s as demand changed from mainframe computers to personal computers.
The mistake made in Japan was the inability to alter the culture of extreme technological excess and chips continued to be made at quality levels far greater than that required by the PC dominated marketplace. Japanese manufacturers have been unable to reduce manufacturing costs resulting in chips that are too expensive to compete with foreign competition on the world market.