The Japanese semiconductor is facing a huge challenge. From 51% market share in the late 1980s, Japan’s market share has fallen 10% every decade since – to 41% in 1994, to 29% in 1998 and to 20% in 2010, pointed out J. J.Yamaguchi of Renesas to the IEF2011 meeting in Seville this morning.
So the Japanese strategy is ‘selection and concentration’, said Yamaguchi, and a focus on the new semiconductor industry emerging around environmental products, healthcare products and safety/security products tied into the high-speed communications ICs required to operate in the Cloud.
In practice this means looking at facilitating progress in mobile terminals (phones, tablets, mobile PCs, communications (LTE, HSPA+, Wimax etc), in servers/storage and in sensors, said Yamaguchi.
As people in emerging countries get richer there’s also increasing demand for what Yamaguchi called ‘preferential consumption products’ – cars, phones cameras etc.
The trends Yamaguchi identified are: the profitability of consumer products falls as their scale grows; business models combining hardware and software are growing; new growth areas are emerging from social needs; the share accounted for by merging markets is expanding; the cost of investment in plant and equipment continues to grow.
He saw increasingly stiff competition in ASSPs and a trend for companies to make fewer products.
Yamaguchi’s advice to the Japanese chip industry was to use Japan’s high standing in the industry to concentrate on high market share products like NAND, MCU, DRAM. CMOS sensors, MCUs and power devices, and exploit the strengths of the IDM such as high reliability, small quantity and large variety manufacturing