Foreign Firms Set Semiconductor Sales Record in Japan : Trade: The rise follows years of criticism from U.S. officials. The U.S. may try to apply numerical targets to other products.

From Associated Press

Overseas manufacturers captured a record share of Japan's semiconductor market in the last three months of 1994, according to figures released Friday.

U.S. trade officials said 23.7% of the semiconductors bought by Japanese firms in the period came from overseas, up from 23.2% the previous quarter.

For all of 1994, international companies captured 22.4% of the Japanese chip market.

The Japanese government, which counts some chips that Washington doesn't, put the fourth-quarter share at 24.7% for international firms, up from 23.4%.

Japanese companies and government agencies for years have been criticized by the United States and others for buying computer chips nearly exclusively from domestic companies.

U.S. Trade Representative Mickey Kantor called the results "an important milestone" in a 1991 U.S.-Japan semiconductor pact.

"While I am pleased to see this continued improvement, I believe that more can be accomplished," Kantor said.

The trade agreement set a target for a 20% share of Japan's chip purchases to be done overseas, and then a "gradual and steady increase."

Early last year, U.S. officials had called for emergency steps to improve the foreign share after it fell below 20% in the third quarter of 1993.

"We have certainly come a long way," said Andrew A. Procassini, president of the U.S. Semiconductor Industry Assn. "We have an agreement that has actually produced results and has fostered cooperation."

Toori Sato, an official of the Electronic Industries Assn. of Japan, said the results showed that "foreign semiconductors are firmly established in the Japanese market."

In 1986, international companies provided only 8.5% of the chips sold in Japan.

Over the past year, worldwide demand for computer chips has become so strong that many manufacturers have had trouble keeping plant capacity up. On Wednesday, the SIA announced that orders for semiconductors in the North American market hit a record in February.

Japan's semiconductor market is the world's second largest after the United States, and accounts for about 34% of world sales, according to World Semiconductor Trade Statistics.

The Clinton Administration has urged that Japan set similar market share targets in other trade agreements, but Japanese officials have refused, saying that to do so would violate free trade principles.

Some U.S. trade officials now acknowledge that Washington frequently misinterpreted the 20% figure in the semiconductor pact as a commitment by Japan instead of a goal.

Negotiators used the figure to pressure Japan.

Auto trade talks between the two countries are expected to resume later this month after being stalled over the issue of numerical trade targets.

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