Tuesday, March 21, 2017

What Ever Happened to the Japanese Microchip Industry?

David E. Sanger wrote in the New York Times in 1986 that the
American electronics industry . . . has virtually lost the entire memory market to low-cost Japanese competitors . . . Dozens of American manufacturers have fled the commodity memory chip business, unable to match Japan's remarkable manufacturing efficiencies or constant price cutting . . . By most estimates, Japanese manufacturers have seized a remarkable 85 percent of the market for the current generation of chips . . .
Moreover, Japan's lead showed signs of widening. By 1988 the country accounted for over half the world's microchip production (51 percent in 1988), with the top three makers (NEC, Hitachi, Toshiba) all Japanese. At the end of the decade Japanese chip makers were expected to put 16-megabit chips onto the market while U.S. companies were just getting around to making 4-megabit ones (two doublings behind), and Japan was the first to unveil the prototypes of far more advanced chips than those--the 64-megabit chip in 1990 and the 256-megabit in 1992 (64 times--6 doublings--as powerful as the 4-megabit chip standard at the time), events which got considerable press coverage. Indeed, Japan's position in the sector was regarded as emblematic of its industrial prowess, and even a basis for claims of superpower status.1

Such talk evaporated during the '90s, and seems virtually forgotten today.

What happened?

The conventional wisdom chalks it up to the idea that the Japanese companies weren't doing so well as they had been given credit for, the U.S. better--that Japanese business had got about as far as its practices could take it and was too rigid to change, in contrast with freewheeling, endlessly reinventing itself America, epitomized by that subject of endless libertarian paeans, the Silicon Valley start-up.

However, while American films rallied (with Intel the outstanding success story) and Japanese firms made mistakes in coping with the resulting, more competitive market (like the flawed restructuring efforts that spun off firms too undercapitalized to compete), the reality is more complex. Such a disproportionate share of any market as Japan enjoyed in the late '80s generally tends to be fleeting--especially when the product is evolving rapidly, and the market rapidly growing. Both of these considerations applied here, as rapidly growing chip capabilities meant rapid changes in the productive plant, and chip consumption rose exponentially--making advantage temporary, and creating opportunity for those looking to grab a piece of the action.

There was, too, the question of how Japanese chipmakers came to enjoy their extraordinary '80s-era position in the first place--not only through the quality of their chips, but the success of their most important customers in their own lines. These happened to be Japanese makers of consumer electronics (like Sony), who had the dominant global position in their own sectors in those years--which, since they bought their chips from a few Japanese firms, made those industrial giants' squarely orienting themselves to their chip needs a plausible strategy. However, as the share of the world consumer electronics market these companies enjoyed declined, so did their share of the potential customer base for microchips--just as new, lower-cost chip producers entered the world market (like South Korea's Samsung).

Still, for all the changes, and the missteps, Japan remains a significant producer of chips today--accounting for 14 percent of the world total in 2013, after just the United States and South Korea.

Additionally, there is the matter of the market for the equipment needed to make the chips, like the raw materials from which the chips are made (like silicon wafers) and the manufacturing equipment needed to print circuits on them (like photolithography equipment). Japan's production accounts for an extraordinary 50 percent of the former, and 30 percent of the latter. While less often publicized, such totals in these difficult, exacting areas are arguably even more impressive testaments to Japan's manufacturing prowess than the chip sales of three decades ago.

1. Shintaro Ishihara famously declared in his book The Japan That Can Say No that Japan's lead in the technology put the nuclear balance in its hands, because that nation alone could make the chips needed for accurate nuclear warhead guidance, while the victory of U.S. forces in the 1991 Gulf War was hailed as actually a triumph of Japanese technology, because there were Japanese components guiding its weapons.

Review: Power-Up: How Japanese Video Games Gave the World an Extra Life, by Chris Kohler
Revisiting The Japan That Can Say No
Reading Shintaro Ishihara's Season of the Sun

March 2017

What Ever Happened to the Japanese Microchip Industry?

Thursday, February 23, 2017

Review: Power-Up: How Japanese Video Games Gave the World an Extra Life, by Chris Kohler

Indianapolis, IN: Bradygames, 2004, pp. 312.

Chris Kohler's book, as the title promises, is concerned with the revolution wrought by Japanese video game makers between the 1970s and the 1990s, in which Nintendo and its most famous titles (from Donkey Kong to Pokemon) loomed so large. The subject is complex enough that, rather than attempting to offer a relatively linear history of the field, the book goes through it subject by subject, generally with good results. Kohler displays a robust interest in the formal aspects of the games--their appearance, structure, modes of play and storytelling--and explains these incisively, both in cases of specific, earlier pioneering games, and the larger history of the form. This extends to minute analysis of classics from Donkey Kong to the original Final Fantasy with the aid of numerous screen captures arranged in flow chart-like fashion, affording not just something of a lesson in the Poetics of Video Gaming, but enabling us to look at these old games with fresh eyes.

In doing justice to his subject matter Kohler's discussion extends well beyond gaming to its interconnections with manga, anime, pop music and other corners of Japanese pop culture--which did so much to make Japanese video games what they were. The creative stars were not techies, but had interests and backgrounds in the visual arts and storytelling media (like manga), as was the case with Pac-Man creator Toru Iwatani; Donkey Kong, Mario and Zelda creator Shigeru Miyamoto; and Dragon Quest creator Yuji Horii. And this was crucial to the contributions that they did make to their field--the appealing characters, narratives, visuals, music and gameplay experience, and the associated techniques and refinements (like cinematic cut scenes) that lifted the genre above the minimalist sports and shooting games that defined the early, more narrowly programmer-driven history of the field. This extends even to glances at intriguing but oft-overlooked games like Miyamoto's RPG Mother, and Fumito Ueda's ICO. There is also a good deal of material on how the product had to be translated and localized for sale in foreign markets.

It might be added that Kohler's book contains enough material on the history of the business to be interesting as a recounting of the development of the information technology sector--the more so for how different this recounting is from the Silicon Valley mythology to which discussion of the American gaming industry (all too predictably) conforms. Start-ups by computer programmers (like INIS) do have their part in the story. However, the businesses that played the central role were established companies in other fields that took a chance on the new sector (Nintendo, for example, was an almost century-old manufacturer of playing cards), and the stars of the story, artists that they were, Company Men, rather than entrepreneurs striking out on their own.

Moreover, while Kohler's book has undoubtedly dated in its coverage of a relatively fast-changing field, much of what it says still seems relevant--in particular, Nintendo's accent on sheer fun (which in the years since held the Wii in good stead, relative to the high cost and hardcore gaming orientation of other consoles). Additionally, the timing of Power-Up's release--in the early 2000s--is still recent enough to provide a certain amount of perspective on the major changes in gaming since then, namely the decline of the standing of Japanese firms relative to Western ones in the field; the claims that Nintendo may have gone from cutting-edge to backward-looking; and the possibility that this is just part of a still larger story, namely the transition of gaming away from consoles to online and mobile devices.

That said, it could be argued that, important as Nintendo is in this story, the discussion may be a bit too Nintendo-centric. (Despite some very real successes, Sega, for example, does not even rate an index listing here.1) It should also be remembered that while Kohler is generally knowledgeable about and respectful of the culture of which he is writing, this is nonetheless an American book for an American market. Anyone looking for much discussion of the reception for Japanese games in any foreign market but the U.S. would have to look elsewhere. On some occasions, he also approaches his subject through American stereotypes about the two countries (e.g. conformist, stifling Japan vs. everybody-chases-their-dreams America), as when he recounts the career of Pokemon creator Satoshi Tajiri, declaring that
had Japanese societal norms had their way, Pokemon would never have been born, its creator not given the freedom to follow his own path . . . he wouldn't go on to college, but spent two years at a technical school. His father got him a job as an electrical technician. He refused to take it.
The expectation that one go on to college and take the workaday job rather than devote oneself to a creative career is hardly some foreign exoticism, but similarly the norm in America (where parents are also apt to be far from pleased to hear their kid tell them they mean to be an artist rather than go for the practical degree and the steady eight-to-six).

There are also instances in which the presentation of his information could have been improved. Despite the distinctly American view, Kohler does not always provide the clarifying notes that an American audience would expect. (The Super Mario Brothers 2 discussed in his overview of that series is not the one we recall in North America--and that fact only gets proper acknowledgment in a much later chapter.) Additionally, there are sometimes listings of information within the main text of a chapter that might have been better reserved for tables or appendices--as with a seven page listing of releases of soundtracks of the music of the Final Fantasy game franchise.

However, these are comparative quibbles in a book that I, for one, found to be well worth my while; and it probably says something positive about it that Kohler released an updated and expanded edition of the book in 2016 (24 pages longer, according to its page on Amazon). You can read about it here.

1. Sega's Master system, after all, was the closest thing Nintendo had to a rival in the 8-bit era, and its Genesis console virtually on par as competitor in the 16-bit era, while later consoles met with varying degrees of success up to the Dreamcast. Additionally Sega produced one of the few video game characters that can be compared with Mario as a pop culture icon, Sonic the Hedgehog.

A Fragment on Fan Writing
Just Out . . . The End of Science Fiction?
The Twilight of the Action RPG?
My Posts on Gaming
Just Out . . . (Star Wars in Context, paperback edition)
Just Out: After the New Wave: Science Fiction Today
Preview Cyberpunk, Steampunk and Wizardry
On the Differences Between Japanese and Western RPGs

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