Chip Makers Get No Guarantees

Times Staff Writer

American semiconductor makers have been told they are not going to get an assured share of the Japanese market.

The Semiconductor Industry Assn. has complained in Washington that unfair trade practices deny American manufacturers a fair share of the Japanese market. But a U.S. official, who asked not to be identified by name, said this week after two days of negotiations here that the U.S. government does not believe in fixing shares.

"You've got to let the market forces work," he said.

The Reagan Administration, he said, is trying to resolve complaints about unfair trade and "dumping" of manufactured goods by the Japanese. He added: "We've made it clear to the SIA and to the Japanese government that we're not setting market shares here. I don't think the SIA is asking for that. But if they are, they are not going to get it."

Differences Narrowed

The official said that Washington "would like to see opportunities increase," both for semiconductors shipped to Japan from the United States, which account for 11% of Japan's market, and for semiconductors made in Japan by subsidiaries of U.S. firms here, which account for 8% of the market.

He said that, in the two days of talks, Japan and the United States had considerably narrowed their differences on the cost of semiconductors sold in the United States and in third countries. However, on the question of greater access to Japan's market, he said, the talks had been "a little more squishy."

Negotiations will be resumed in Washington at the end of March, and the official said that by then he hopes to be close to a settlement. Officials at the Ministry of International Trade and Industry said they hope that the Washington talks will resolve the issue before Prime Minister Yasuhiro Nakasone's visit to Washington, scheduled for April 12-14.

According to reports in the Japanese press, the U.S. negotiators urged the Ministry of International Trade and Industry to set up a system that would prevent dumping or underpricing. This reportedly would involve the monitoring of pricing and production costs for every Japanese company selling semiconductors in Japan, the United States and third countries.

Investigation Under Way

Japan is said to have proposed the establishment of two levels of "floor prices," one for makers with the lowest production costs and a higher level for the others.

An investigation is under way as the result of a preliminary ruling by the U.S. International Trade Commission on Jan. 22 that the Japanese were dumping 256-kilobit dynamic random access memory chips in the U.S. market. Barring a negotiated settlement of the question, the ITC will be obliged to make a final ruling, including assessment of dumping duties, on July 29.

On another matter, the U.S. official said that negotiators had narrowed to a single issue their differences in a longstanding dispute over Japan's refusal to permit American lawyers to practice in Japan. The remaining issue, he said, is Japan's insistence that U.S. lawyers be allowed to advise clients in Japan only on the laws of the American state in which they have been admitted to practice.

He said this is a technical issue that the negotiators "should be able to iron out in a few days or a week."

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