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Chip Makers to File Complaint Against Japan

Times Staff Writer

The nation’s semiconductor industry, mired in a severe downturn that it blames partly on a flood of cheap chips from Japan, is expected to file a formal trade complaint today intended to win greater access to Japanese markets.

Although the U.S. makers of integrated circuits have had squabbles with Japan since the mid-1970s, the petition to be filed with the U.S. trade representative will be the first official protest and could lead to retaliation against that nation’s fast-growing semiconductor industry.

The step comes on the heels of last week’s disclosure of an incriminating internal memo exhorting U.S. peddlers of certain Hitachi integrated circuits to undercut competitors’ prices by 10%. Recent sharp price cuts have exacerbated a sales slump.

Executives of Hitachi, one of Japan’s leading chip makers and a major player in the U.S. market, disavowed the memo. But U.S. executives say it was part of a deliberate strategy, used by Japan in other industries, to establish itself in foreign markets with bargain-basement prices made possible by government subsidies.

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The petition is to be filed by the San Jose-based Semiconductor Industry Assn., a lobbying arm of the U.S. industry, under Section 301 of the Trade Act of 1974. President Reagan, after an investigation by a special trade representative, could impose a wide range of retaliatory measures. But trade officials in Washington say the technique has seldom had much direct success.

Rather, the petition is considered a potent bargaining tool in the Administration’s effort to win better access to Japan for this country’s high-technology industries.

“Sometime . . . there’s going to be a need for an adjustment in the way Japan does business,” said Thomas Hinkelman, president of the semiconductor group. “We would like to see this become the cause celebre in this country’s trade disputes with Japan.”


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