2009/6/28 9：19
Decline of Japan's semi-conductor industry
Now, the word of "GM" doesn't mean "General Motors," but "Government Motors" because Washington has 60% of its stake, ref.(>"Death of GM")
Although GM now aims turning around backed by U.S. government, some argues that "as successful turning around of GM isn't secured that injection of public money into GM could be watering the desert."
It has a point. It seems to me that what GM needs isn't Chapter 11 but Chapter 7 to liquidity itself.
Anyway, unfortunately, same can be said about >"Elpida Memory Inc." that is the only DRAM producer still remains in Japan.
Once made-in-Japan semi-conductor swept the world over. During the Cold War, it was well said that "if it weren't for the made-in-Japan memories, U.S. missiles would've not fly correctly."
But such conditions are no longer true. Since then, semi-conductor industry in Japan has lost its global competitiveness and declined completely.
Japan's DRAM makers withdrew from business one after another. As the result, only Elpida is the last domestic DRAM maker that was given birth via merger of NEC's DRAM division and Hitachi's one.
But now, Elpida is also in a precarious state due to fierce battle against DRAM makers in South Korea and Taiwan.
Indeed, as business conditions that surround Elpida has been getting worse since subprime fiasco emerged that it is losing huge amount of money.
At the beginning of this year, it was reported that Elpide was negotiating with a counterpart in Taiwan, ref.(>"Elpida in talks with Taiwan chip trio")
It means that board members of Elpida think that "it is already impossible for Elpida alone to survive."
Hitachi, former parent company of Elpida, also analyzed that there was no future for domestic DRAM production, ref.(>"Hitachi to sell Elpida stake, exit DRAM biz")
Indeed, Elpida asked for help to the government, ref.(>"Ailing chip maker Elpida applies for DBJ cash" & "Chip maker Elpida may request public funds
>"エルピーダ支援に2000億円 官民出融資、３年で"
> 半導体大手エルピーダメモリの再建に向けた官民の金融支援が総額 2000億円規模に達することが明らかになった。日本政策投資銀行の資本支援やメガバンクによる融資に加え、国際協力銀行の緊急融資と官民ファンド「産業革新機構」の出資などを総動員する。
> パソコンなどの基幹部品である DRAM事業を日本で唯一手掛ける同社を支援することで、先端産業の国際競争力を保つ狙い。政府は支援を緊急避難と位置づけており、「出口戦略」も問われそうだ。
> 金融支援の約 2000億円は財務基盤の強化や運転・設備投資資金としてエルピーダが向こう３年間に調達が必要になるとみられる金額。業績が悪化すれば額がさらに膨らむ恐れもある。)
But it is still doubtful whether successful turning around of Elpida is possible or not, ref.(>"Can public aid save chip makers?")
What are the causes of defeat of Japan's semi-conductor business? First of all, generous technical grant toward Taiwan and South Korea should be pointed out. As the result, they have grown to be a powerful competitors.
Namely, Japan despised them -- just like once the U.S. considered Japan for a while after the WW2.
Second, becoming to commodity of some semi-conductor products that were once specialities.
Indeed, both Taiwan and South Korea purchase capital goods -- such as machineries, plants, pars and materials from Japan's firms -- for the sake of their business.
If foreign firms purchase production facilities from Japan, they can produce same products of Japan's makers' -- it means semi-conductor products become to be commodity.
Third, foreign exchange rates that directly affect production costs should be pointed out. Since subprime fiasco has emerged, JPN\ appreciated and South Korea's Won depreciated against US$.
So made-by-South Korea products are predominant over competitors in Japan as the result of fluctuation of foreign exchange rates.
Now, it is already impossible for Japan's electric firms to beat South Korean Samsung Electronics Co., Ltd.
Some economists criticize failures of management of Japan's firms with a triumphant air. But foreign exchange rate issue is far from a problem of corporate management.
Once one product becomes from speciality to commodity, neither performance nor quality but price does matter.
Some argue that "Japan's firms should shift from commodity products to speciality ones." But it is always true that "easier said than done"
Anyway, when both South Korea's stock market and currency declined, it was a perfect opportunity for Japan to purchase stock of Samsung and other South Korea's firms.
If Japan did that, the more South Korea would earn profits the more Japan would gain both capital gains and income ones as a stockholder, ref.(>"Perfect opportunity to beat South Korea")
If Jews were in Japan's standpoint, they would do that without hesitation.
But with difference of national trait, Japan missed perfect opportunity to become a big stockholder of South Korea.
Now, it is impossible for Japan to make a recovery against South Korea in DRAM business, and so be in mobile phone business.
What does matter for Japan is damage control -- I mean to avoid similar defeats against South Korea, Taiwan, China and other emerging economies in liquid crystal-, solar battery-, auto- and so on industry.
For the sake of survival in the mega global competition era, Japan should stock inner battles among Japan's firms.
Indeed, there are too many electronic and electronics firms in Japan. And same can be said about auto makers. Via bold trade-rearrangement, Japan should reduce the number of resemble firms.
If necessary, authority shouldn't hesitate to emit influence to create national champions via backing of M&As.
For your ref.>Japan's economy, A hollow recovery
>Decline of Japan's electric and electronic industry
0
Although GM now aims turning around backed by U.S. government, some argues that "as successful turning around of GM isn't secured that injection of public money into GM could be watering the desert."
It has a point. It seems to me that what GM needs isn't Chapter 11 but Chapter 7 to liquidity itself.
Anyway, unfortunately, same can be said about >"Elpida Memory Inc." that is the only DRAM producer still remains in Japan.
Once made-in-Japan semi-conductor swept the world over. During the Cold War, it was well said that "if it weren't for the made-in-Japan memories, U.S. missiles would've not fly correctly."
But such conditions are no longer true. Since then, semi-conductor industry in Japan has lost its global competitiveness and declined completely.
Japan's DRAM makers withdrew from business one after another. As the result, only Elpida is the last domestic DRAM maker that was given birth via merger of NEC's DRAM division and Hitachi's one.
But now, Elpida is also in a precarious state due to fierce battle against DRAM makers in South Korea and Taiwan.
Indeed, as business conditions that surround Elpida has been getting worse since subprime fiasco emerged that it is losing huge amount of money.
At the beginning of this year, it was reported that Elpide was negotiating with a counterpart in Taiwan, ref.(>"Elpida in talks with Taiwan chip trio")
It means that board members of Elpida think that "it is already impossible for Elpida alone to survive."
Hitachi, former parent company of Elpida, also analyzed that there was no future for domestic DRAM production, ref.(>"Hitachi to sell Elpida stake, exit DRAM biz")
Indeed, Elpida asked for help to the government, ref.(>"Ailing chip maker Elpida applies for DBJ cash" & "Chip maker Elpida may request public funds
>"エルピーダ支援に2000億円 官民出融資、３年で"
> 半導体大手エルピーダメモリの再建に向けた官民の金融支援が総額 2000億円規模に達することが明らかになった。日本政策投資銀行の資本支援やメガバンクによる融資に加え、国際協力銀行の緊急融資と官民ファンド「産業革新機構」の出資などを総動員する。
> パソコンなどの基幹部品である DRAM事業を日本で唯一手掛ける同社を支援することで、先端産業の国際競争力を保つ狙い。政府は支援を緊急避難と位置づけており、「出口戦略」も問われそうだ。
> 金融支援の約 2000億円は財務基盤の強化や運転・設備投資資金としてエルピーダが向こう３年間に調達が必要になるとみられる金額。業績が悪化すれば額がさらに膨らむ恐れもある。)
But it is still doubtful whether successful turning around of Elpida is possible or not, ref.(>"Can public aid save chip makers?")
What are the causes of defeat of Japan's semi-conductor business? First of all, generous technical grant toward Taiwan and South Korea should be pointed out. As the result, they have grown to be a powerful competitors.
Namely, Japan despised them -- just like once the U.S. considered Japan for a while after the WW2.
Second, becoming to commodity of some semi-conductor products that were once specialities.
Indeed, both Taiwan and South Korea purchase capital goods -- such as machineries, plants, pars and materials from Japan's firms -- for the sake of their business.
If foreign firms purchase production facilities from Japan, they can produce same products of Japan's makers' -- it means semi-conductor products become to be commodity.
Third, foreign exchange rates that directly affect production costs should be pointed out. Since subprime fiasco has emerged, JPN\ appreciated and South Korea's Won depreciated against US$.
So made-by-South Korea products are predominant over competitors in Japan as the result of fluctuation of foreign exchange rates.
Now, it is already impossible for Japan's electric firms to beat South Korean Samsung Electronics Co., Ltd.
Some economists criticize failures of management of Japan's firms with a triumphant air. But foreign exchange rate issue is far from a problem of corporate management.
Once one product becomes from speciality to commodity, neither performance nor quality but price does matter.
Some argue that "Japan's firms should shift from commodity products to speciality ones." But it is always true that "easier said than done"
Anyway, when both South Korea's stock market and currency declined, it was a perfect opportunity for Japan to purchase stock of Samsung and other South Korea's firms.
If Japan did that, the more South Korea would earn profits the more Japan would gain both capital gains and income ones as a stockholder, ref.(>"Perfect opportunity to beat South Korea")
If Jews were in Japan's standpoint, they would do that without hesitation.
But with difference of national trait, Japan missed perfect opportunity to become a big stockholder of South Korea.
Now, it is impossible for Japan to make a recovery against South Korea in DRAM business, and so be in mobile phone business.
What does matter for Japan is damage control -- I mean to avoid similar defeats against South Korea, Taiwan, China and other emerging economies in liquid crystal-, solar battery-, auto- and so on industry.
For the sake of survival in the mega global competition era, Japan should stock inner battles among Japan's firms.
Indeed, there are too many electronic and electronics firms in Japan. And same can be said about auto makers. Via bold trade-rearrangement, Japan should reduce the number of resemble firms.
If necessary, authority shouldn't hesitate to emit influence to create national champions via backing of M&As.
For your ref.>Japan's economy, A hollow recovery
>Decline of Japan's electric and electronic industry
0
