Chip War: The Fight for the World's Most Critical Technology

by Chris Miller

Japanese chipmakers kept investing and producing, grabbing more and more market share. Because of this, five years after the 64K DRAM chip was introduced, Intel—the company that had pioneered DRAM chips a decade earlier—was left with only 1.7 percent of the global DRAM market, while Japanese competitors’ market share soared. Japan’s firms doubled down on DRAM production as Silicon Valley was pushed out. In 1984, Hitachi spent 80 billion yen on capital expenditure for its semiconductor business, compared to 1.5 billion a decade earlier. At Toshiba, spending grew from 3 billion to 75 billion; at NEC, from 3.5 billion to 110 billion. In 1985, Japanese firms spent 46 percent of the world’s capital expenditure on semiconductors, compared to America’s 35 percent. By 1990, the figures were even more lopsided, with Japanese firms accounting for half the world’s investment in chipmaking facilities and equipment. Japan’s CEOs kept building new facilities so long as their banks were happy to foot the bill.