Wrong of U.S. to Stop Sale of Semiconductor Firm, Japanese Claim

From Reuters

A Japanese minister today lashed out at U.S. government officials whose interference helped block the sale of America's Fairchild Semiconductor to Japanese computer giant Fujitsu.

"I think it was improper for U.S. government officials to intervene to the extent they did," Minister of International Trade and Industry Hajime Tamura told reporters.

"This is entirely a private-sector matter and is not a matter for governments' comment," he added.

Fairchild's French majority owner, Schlumberger, said Monday that it was terminating an agreement in principle for Fujitsu to buy 80% of its Fairchild computer chip operations because mounting political controversy in the United States made it unlikely the deal could be completed in a reasonable time. (Story in Part IV, Page 1.)

The sale was opposed by both Commerce Secretary Malcolm Baldrige and Defense Secretary Caspar W. Weinberger on the ground that it posed a national security problem by possibly making the U.S. military dependent on foreign sources for technology.

Retaliation or Bargaining Ploy

But the Administration's action was also viewed by industry analysts as retaliation or a bargaining ploy in a longstanding trade dispute between the United States and Japan.

Since the Fairchild deal was originally proposed in October, Washington has accused Japan of denying access to its supercomputer market and circumventing last year's trade accord on semiconductors.

Japanese officials said today that the pact is working, ahead of an April 1 deadline for them to prove their case. "We feel that we are implementing the agreement in good faith and the situation does not run counter to the pact," said Osamu Watanabe, director of the Ministry of International Trade and Industry's Americas and Oceanic division.

The agreement was designed to halt predatory pricing and increase access to the Japanese market for U.S. semiconductor companies.

Industry analysts said Japanese high-technology firms are likely to take a lower profile in investing in the United States as a result of the Fairchild political furor. But the firms are unlikely to halt their efforts to expand production and design facilities in the United States, they added.

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