Joint Projects of Government and the Private Sector in the Semiconductor Industry

By Hajime Yamada (GLOCOM)

On July 11th of 2002, an announcement was made on the establishment of joint capital investment for research and development (R&D) of the next-generation semiconductor. The company will conduct joint studies on design and manufacturing technology as a platform for development of large-scale integrated (LSI) circuits with partial financial support from the government. Its aim is to form a collaborating body of major semiconductor manufacturers in Japan to strengthen R&D of the platform technology as a source of industrial competitiveness. The longer-term goal is to compete against overseas manufacturers such as those in the U.S. and Korea.

The new company is called "Advanced SoC Platform (ASPLA)", and is capitalized at 950 million yen. Six corporations, including NEC Corporation, Fujitsu Limited, Hitachi, Ltd, Matsushita Electric Industrial Co., Ltd., Mitsubishi Electric Corporation, and Toshiba Corporation, provided 150 million yen each, and Oki Electric Industry Co., Ltd., Rohm Co., Ltd., Sanyo Electric Co., Sharp Corporation and Sony Corporation contributed ten million yen each. Mr. Keiichi Kawade of Toshiba assumed the office of the president. This new company is going to develop LSI circuits of 90 nanometers (nm) in width, which are in increasing demand , by utilizing its newly built facilities in Sagamihara city, Kanagawa Prefecture.

System on Chip (SoC) is a semiconductor chip loaded with all the necessary functions, including processor and memory, to be able to work as a system.

Japan's semiconductor industry prospered in the 1980s. However, business worsened in the 1990s due to pressure from other countries that marketed low-price memory chips such as Korea, and with the monopolization of the market of high added value products by the U.S. The new company was established in cooperation with the government and the private sector to break through the situation and to regain Japan's power.

However, the new company faces a big problem: numbers of such ventures already exist in Japan.

Semiconductor Technology Academic Research Center is one of the oldest entities. It was established in 1995 by manufacturers including Matsushita, Sharp, Sony and Mitsubishi Electric for the main purpose of conducting investigation and study on design technologies of semiconductors. Every year a fund is collected from the investing companies and placed in trust for study activities. The center conducts joint research, mostly universities, on selected themes that would be transferable to the industry within ten years.

Semiconductor Leading Edge Technologies is another such company, founded in 1996. It studies advanced platform technology corresponding to semiconductor technology in the future as well as evaluating next-generation semiconductor manufacturing equipment and materials. Stockholders include Fujitsu, Hitachi, Matsushita, Mitsubishi Electric, NEC Corporation, Oki Electric, Rohm, Sanyo, Sharp, Sony and Toshiba.

Moreover, a project called ASUKA has been organized as a combination of Semiconductor Technology Academic Research Center and Semiconductor Leading Edge Technologies. ASUKA stands for Advanced Semiconductors through Collaborative Achievement. A total amount of 76 billion yen is being invested in this project during five years starting in 2001 for setting up design and processing technology to materialize SoCs with a width of 100 to 70 nm.

Another project called "Semiconductor MIRAI Project" was launched on August 1st of 2001, with a joint body of industry-government-academia to develop next-generation semiconductor technology. This project will conduct R&D on the ultra-minute processing technology to create SoCs of 50 to 70 nm in width within seven years.

Among these many ventures the lists of investing companies are quite similar, with some of the ventures receiving financial support by the government.

In the semiconductor industry in the 1970s, a successful National Project on VLSI research and development was jointly formed by the government and the private sector, which is believed to have promoted the strength of Japan's competitiveness. Since then, many ventures have been established to achieve another dream. However, I wonder if Japanese corporations can afford investing their resources on R&D on similar themes, and how the selection to adopt results is determined. I believe that Japanese corporations should provide insights into how to put these parallel activities in order, and then should proceed to distinguish between themes that should be conducted jointly from those more suitable to independent R&D, from a strategic point of view.