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Now, Those Big Chip Budgets Are Too Much Even For Japan


Developments to Watch

NOW, THOSE BIG CHIP BUDGETS ARE TOO MUCH EVEN FOR JAPAN

To win the largest chunk of the world semiconductor market, the Japanese relied chiefly on cash. Whenever the industry entered one of its periodic downturns in the 1980s, the Japanese outspent U.S. rivals--and were ready for the recovery. No more, perhaps. Japan now has so much excess chip capacity that its producers are slashing capital budgets, according to a study by Dataquest Inc.

The San Jose (Calif.) market watcher says Japanese spending on chip production will fall 24% in 1992. Worldwide spending, by comparison, will dip 9.5%. Moreover, much of a 7.6% decline in the U.S. stems from a 50% drop in Japanese investments in U.S.-based plants, to about $200 million this year. Top-tier U.S. chipmakers won't cut back at all, says Dataquest. On a related front, VLSI Research Inc., another San Jose market researcher, reports that U.S. suppliers accounted for 47% of the $9.9 billion spent worldwide on chipmaking equipment last year, up three points from their 1990 share.EDITED BY OTIS PORT


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