Intenational Studies Industry Analysis

Executive Summary

As part of the EMBA program, the opportunity to travel abroad and visit companies in Korea and Japan served as a rewarding learning experience as cultural immersion allowed a better understanding of how business is conducted under different cultural and political environments.  As technology continues to flourish around the world, one of the main key elements that continues to drive business and economic stability in these countries is the semiconductor industry. In short, semiconductors are the key component to the electronic products and devices that are produced by both these countries.  By researching current business models and orchestrating analysis on Japan’s technology industry, it is evident that the precedent for the global stage is clearly marked.  This analysis will take a look at the companies in Japan, and how they not only compete, but continue to flourish on the global stage in the face of strong adversary within Asia. Since the 1960’s the United States has been the main dominant producer of semiconductors whereas large corporations in Korea and Japan share the top sales and manufacturing slots of the semiconductor market with the United States. This industry analysis will delve into the fine details of the history take a look at the history of the semiconductor industry, what drives the industry, what are the biggest challenges that are faced by Japanese industry and lastly how will these challenges be addressed and overcome so that these semiconductor companies within Japan remain in business and competitive amongst their global competitors.

History of the Semiconductor

This history of the semiconductors can be traced back to 1901 with the advent of the Radio. (“The History of the Semiconductor Industry - Blog - The Quartz Corp | High Purity Quartz” 2016).  Although the radio would be considered year zero for the industry, it was not until the invention of the transistor and the integrated circuit that was created at Bell Labs in New Jersey in 1947 by John Bardeen, Walter Brattain and William Shockley.  When William Shockley decided to leave Bell Labs he started his own laboratory in Palo Alto and attempted to attract previous colleagues to join him, when that failed and Shockley did not continue his research into silicon-based transistors the Fairchild Semiconductor Company was created by employees left behind by Shockley.  In the late 1950s, around a decade after the first transistor was produced, integrated circuits were invented.  In the early stages of development and technological research the first integrated circuits had less than 12 transistors, while todays have over 20,000,000 transistors. Clearly it is evident that the technology industry has surpassed numerous hurdles and is continuing to lead to great achievements. Geoffrey Drummer was the first to conceive of the idea of integrated circuit.  With that being said, it was Jack Kilby in 1958 who first bonded 3 transistors together.  Robert Noyce merged the idea with Jean Hoemias planar process, and the first modern semiconductor was born.  The 1980s is often known as the period of early maturity for semiconductors, and is the basis for what we see today.  Applied Materials, ASML, and Novellus all made landmark products during this period.  EDA (Electronic Design Automation) became vital to managing the large scale integration levels (LSI), which started at 10,000 transistors and ended at 100,000 transistors.   Without EDA, it would not have been possible to develop the technology further.  Additionally, EDA made it possible to split design and fabrication, dividing the market as we know it today (fabless semiconductor companies and foundries). The developments in the previous decades spurred on growth in the 1990s and 2000s, leading to the boom in personal electronic devices.  Computers, laptops, smartphones and tablets were all made possible by the investment and focus of previous generations of scientists, and have shaped how we communicate on a day to day basis (“The History of the Semiconductor Industry - Blog - The Quartz Corp | High Purity Quartz” 2016)  The semiconductor giants that we know today such as AMD, Intel, and Texas Instruments all have ties back to the Fairchild Semiconductor Company (McLellan 2012).  In a relatively short period of time, the transistor has continued to shape the foundation of the technology that we know and use today.