JAPANESE REBUT US MICROCHIP CHARGES

JAPANESE REBUT US MICROCHIP CHARGES

Japan's electronics industry Tuesday blasted a U.S. industry report that Japan is failing to honor its pledge to open up its microchip market to foreigners.

The U.S. Semiconductor Association warned in an interim report submitted to President Bush Monday that the bilateral chip agreement signed last June is about to collapse as a result.With nine months to go before Japan is supposed to make it possible for foreign makers to supply 20 percent of the Japanese market, U.S. chip makers could be laying the groundwork for pressing the Bush administration for early action.

U.S. officials said they expressed their unhappiness with progress under the agreement to Japanese officials earlier this year, at a Hawaii meeting.

Japanese users are "making every effort to expand foreign market shares in Japan, and we do not think the Japan-U.S. Semiconductor Arrangement is on the verge of failure as alleged by the SIA," said Shin-ichi Itoh, chairman of the Users' Committee of Foreign Semiconductors of the Electronic Industries Association of Japan.

Mr. Itoh said the SIA report was based on an incomplete evaluation of the situation and does not take into consideration the development of design-ins and the long-term relationships between Japanese and U.S. makers.

''At present, the Japanese semiconductor market is confronted with a serious recession," Mr. Itoh said in a prepared statement. "Despite such circumstances, Japanese users are trying very hard to increase market assess for foreign semiconductors. There are many users who try to place orders with foreign makers at the sacrifice of Japanese makers."

The U.S. report noted that the market share of imported chips in Japan has been stuck at 14.3 percent since the first quarter of 1990, despite the Japanese industry's promise to raise that share to 20 percent by the end of this year under the agreement with the United States.

One U.S. official said that only three months of data have come in under the agreement to evaluate its effect.

Data for fourth-quarter sales should be available in about two weeks and will give a better indication of whether the agreement is beginning to increase foreign market share in Japan.

Mr. Itoh said the pact clearly states the 20 percent share figure is guaranteed neither by the Japanese industry nor the Japanese government. Moreover, the figures cited by the U.S. association for the first quarter of 1990 are "only estimates used by the SIA to fashion its arguments," he said.

Official Japanese figures show foreign chips accounted for 16.2 percent of the Japanese market in the July-September quarter of last year, Mr. Itoh said.

"The arrangement also provides for consideration of competitive factors, the efforts made by Japanese and U.S. companies and the Japanese and U.S. governments and other independent factors, which have a significant impact on the market. All such factors have to be fairly and precisely evaluated," he said.

Mr. Itoh said his committee has been making efforts to increase market access, such as cooperating with the SIA in its "priority parts list" proposal and cooperating in individual industry areas, such as automobile production and telecommunications.

He said that the Japanese semiconductor association will open an office in San Jose, Calif., in June to further facilitate market-opening opportunities.

Confrontations between the U.S. and Japanese industries will continue, as long as the two sides remain unable to agree on how to compile market share figures and on whether or not the 20 percent figure was an outright pledge, according to industry analysts in Japan.

Mr. Itoh's statement came shortly after Japan's Ministry of International Trade and Industry announced plans to sponsor a meeting in April of Japanese semiconductor users and foreign makers in a further move to increase access to the local chip market.

The conference, set to open in Tokyo on April 6, will be the fourth in a series of such meetings intended to assist in honoring the agreement with the United States. Ministry officials said Japanese users will take advantage of the conference to announce specific intentions to purchase foreign-made semiconductors.

As with the U.S. auto industry in January, U.S. semiconductor makers could use the added pressure of election-year politics to prod the administration into a firmer stance against Japan.

This could take the form of re-imposing $187 million a year in trade sanctions that were suspended last August when the semiconductor pact was renewed. The U.S. industry had not made such a request, according to U.S. officials Tuesday.