The joint U.S.-Japan relationship suggests that the U.S. semiconductor industry`s assertion that Japan has a closed market for computer chips is not true and that demands for increased state protection will not solve the problem. AMERICAN BUSINESS PRACTICES U.S. consumers were no longer expected to make their own decisions about what to buy. Under the 1986 agreement, the government did not decide how many chips to import from Japan and how much they would cost. The Japanese semiconductor industry developed above all as a sector of the large consumer electronics industry and remained thus, contrary to the American industry. Thus, the Japanese industry consists of a number of major manufacturers such as Fujitsu, Ltd., Hitachi, Ltd., Mitsubishi Corporation, NEC Corporation and Toshiba Corporation. These companies mainly manufacture semiconductors for their own internal use in the various electronic products they manufacture. In 1957, General Electric Company, Raytheon Company, RCA Corporation, Sylvania Company and Westinghouse Electric Corporation were the largest U.S. semiconductor manufacturers, consisting primarily of transistors at that time. These companies produced transistors for their own consumer products, such as radios and televisions, as well as for sale to other companies. In the 1960s, many small U.S.
companies entered the semiconductor market, led by Intel Corporation and Fairchild Corporation. Very quickly, these companies took the semiconductor sector away from the consumer electronics giants. The new companies only produced semiconductors and sold them to companies and incorporated them into other products. This trend of loss of market share in the United States of semiconductors led to policy action in the mid-1980s. Until 1985, U.S. manufacturers imported record numbers of computer chips, particularly Dynamic Access Memory (DRAM) and Eprom Chips (EPROM) to meet their production needs. This year, Japanese companies accounted for 92% of 256K chip sales in the U.S. market. (Semiconductor Protectionism: Goodbye Mr Chips,” Citizens for a Sound Economy Issue Alert, No.
9, August 27, 1986, p. 2.) U.S. semiconductor manufacturers, such as Intel Corporation and National Semiconductor Corporation, responded to the increase in imports by visiting the U.S. government on import restrictions. To become competitive, they must be protected from foreign competition. U.S. companies said their Japanese counterparts were engaged in unfair business practices and may be receiving assistance from the Japanese government. U.S. companies also claimed that Japanese companies had “dumping” computer chips in the United States and other foreign markets, i.e.
they were selling below production costs. U.S. competitors. Today, the U.S. semiconductor industry is divided into three levels of competitors. At the top, there are very large companies that manufacture semiconductors and some finished products such as calculators and mobile phones. These include Motorola Corporation and Texas Instruments Corporation. There are several small and medium-sized companies, including Intel Corporation and National Semiconductor Corporation, which manufacture a large number of semiconductors. At the bottom are many small businesses that have won a niche by producing only one or a few quality products at competitive prices. (Many critics of the U.S. industry complain that large producers spend more money and time to promote congressional import facilitation and continue each other than prepare for international competition. See for example “A Chip Maker`s Profit on Patents: Texas Instruments Angers Industry,” New York Times, October 16, 1990, p.