Foreign Share of Japan Chip Market Sets Record

Overseas manufacturers captured a record share of Japan’s semiconductor market in the last three months of 1995, according to official figures released Tuesday.

U.S. trade officials said 29.6% of the semiconductors bought by Japanese companies in the October-December quarter came from overseas, up from 26.2% in the previous quarter.

For all of 1995, overseas companies captured 25.4% of the Japanese chip market, up from 22.4% the previous year.

The Japanese government, which counts some chips that Washington doesn’t, put the fourth-quarter share at 30.2% for overseas companies, up from 27% in the third quarter.

Officials at Japan’s Ministry of International Trade and Industry said the figures prove that the 1991 Japan-U.S. microchip accord has succeeded and should be allowed to expire at the end of July.

Others who study the market said the agreement had not benefited U.S. companies as much as their competitors.

“If you look at the increases in imported semiconductors by country, most of the overall increase came from the Koreans, who have a lot of cross-license agreements with the Japanese,” said David Bendar, an analyst at Barclays de Zoete Wedd Securities.

For years, Japanese companies and government agencies were criticized by the United States and others for buying computer chips nearly exclusively from domestic companies. In 1986, overseas makers provided only 8.5% of the chips sold in Japan.

Trade officials in Washington have said they want to renew the chip agreement, but can do without a numerical benchmark to measure its success. Japan has objected to numerical targets, saying they are contrary to free trade principles.

Monday’s figures did not include a breakdown by country, but Bendar said it was common knowledge the agreement had boosted the U.S. share less quickly than those of Korea and other competitors.

“The increase in the shares held by companies not backed by American capital show that the trade agreement is not a particularly useful instrument for increasing the U.S. share in Japan,” Bendar said.

Japanese industry officials, however, said U.S. sales were strong.

“Japanese companies are buying up U.S. chips hand-over-fist,” said Tamotsu Harada, a spokesman for the Electronic Industries Assn. of Japan, which published the government figures.

“Japanese competitors have strong dealership networks, and are fairly strong in the area of memory-use chips, but generally speaking, U.S. companies are stronger overall,” he said.