Chip Firms Poised to Push for Action Against Japan
American computer chip producers, angry over Japan’s alleged violation of last year’s U.S.-Japan semiconductor trade agreement, agreed Wednesday not to seek immediate retaliatory sanctions against Japan. They said they would do so next month, barring a dramatic increase in Japanese purchases of foreign-made chips.
Proposing sanctions on selected Japanese imports could prove politically popular in an election year, and several executives on Wednesday seemed to regard such an effort as all but inevitable. The Japanese adamantly deny violating the trade agreement, and any move to impose sanctions could seriously aggravate already strained relations between the United States and Japan.
U.S. chip industry executives are in Washington this week on a lobbying mission. Their central aim is to persuade lawmakers that Japan is abrogating the chip trading pact. The industry is also seeking full financial support for the Sematech chip research consortium, as well as changes in tax law that would make it less expensive to invest in capital equipment.
In a report delivered to President Bush on Monday, the Semiconductor Industry Assn. said Japan is reneging on a commitment to increasing the foreign share of the Japanese chip market to 20%--the central element of the 1991 trade agreement.
In addition, some U.S. vendors say that Japanese chip firms are again engaged in dumping, or selling products at prices below cost. The practice of dumping led to the original 1986 semiconductor trade agreement, which contained controversial provisions that were dropped when it was renewed last year. That agreement established high minimum prices for imported chips.
Wilfred Corrigan, chairman of LSI Logic, and Joseph Parkinson, chairman of Micron Technology, both said in interviews that they had evidence of dumping, though neither company has yet asked for a formal government investigation.
Japanese companies maintain that they are doing their best to increase purchasing of foreign-made chips at a time when the Japanese electronics industry is in a steep recession. They also contest SIA figures showing that the foreign share of the Japanese chip market has stagnated at 14.3%. They point out that a different method of calculation yields a figure of 16.2%.
In a board meeting on Wednesday, the SIA decided to wait until next month, when new market-share figures are available, before seeking retaliatory action. Proposed sanctions would be “carefully crafted measures” designed not to hurt U.S. electronics companies that rely on Japanese chips and other components, the SIA said.
