A look at events in the IT industry in Japan and abroad
US Manufacturers Make Quality Pay in Japan
Lee Kuan Yew, former prime minister of Singapore and current patriarch of
that sternly governed, industrious island state, is no fan of America's
antithetical permissive culture: one often characterized as being dominated
by the cult of the individual that raises the "rights" of one
above the good of many. In a recent interview in Japan's Daily Yomiuri,
though, Lee had nothing but praise for the way in which "American companies
have responded to competition from the Japanese and bounced back."
Intel inside (and outside)
Lee used the auto industry to illustrate his point, but he could just as
easily have drawn on examples from information technology (IT). For instance,
in a little publicized development, Toshiba Corporation -- the world's leading
notebook PC manufacturer -- now relies on Intel to OEM several of its desktop
models, and is talking with Intel about expanding the arrangement. When
you consider the implications, this is extraordinary. Here is a leading-edge
Japanese computer manufacturer actually admitting that an American chip
company can do a better job at producing desktop PCs. Less than a decade
ago, Japan's electronics industry was citing quality problems in American
products as a valid reason for not buying from the United States. The Toshiba
deal thus represents an astonishing turnaround for US quality, or at least
the perception of that quality.
Sure, Intel has cornered the world's market in microprocessors -- the most
important single device in a computer -- and so has an obvious price advantage
over other PC manufacturers. But Toshiba is no slouch when it comes to producing
parts for PCs, making (among other things) peripheral and DRAM chips, motherboards,
CD-ROM drives, and hard disks.
Intel is also gobbling up the PC motherboard business: the printed circuit
boards that carry the key elements of a computer, including processor, memory,
and core logic. Once the domain of Taiwan, the motherboard business is now
dominated by Intel, which will ship an estimated 12 million units this year,
and possibly double that number next year, making it by far the industry's
top supplier, according to OEM Magazine.
The proof is in the printer
Following on Toshiba's OEM heels, Fujitsu recently announced that it will
market ink-jet printers manufactured by Lexmark International under a co-Fujitsu-Lexmark
label in Japan. Connecticut-based Lexmark is the former printer division
of IBM, taken over by an investment group in 1991. The $2 billion Lexmark
is the only company besides Canon to make its own laser printer and ink-jet
printer engines in any substantial number. Just over a year ago, Lexmark
dived into the ink-jet printer business, a segment of the personal printer
market that has seen unit sales skyrocket from 4 million in 1992 to 15 million
in 1994. Lexmark recently opened two new factories (one in the US and the
other in Scotland) to feed its booming business.
Now, Fujitsu wants to offer ink-jet printers alongside its DOS/V machines.
Lexmark, which will see half its revenues come from exports this year, is
eager to help. "When the printer division of IBM was sold, the business
in important Asian countries, such as Japan, Korea, and China, was not included,"
explains Marvin Mann, Lexmark's chairman and CEO. "Since Japan is one
of the largest markets in the world, and the home country of many of our
competitors, entering the market has become a top priority."
Note that Fujitsu's move sets no precedent. NEC has been doing something
similar with Hewlett-Packard (HP) printers since 1994.
A clear trend
US manufacturers have also established a paramount position in the strategically
important workstation business that has undermined the dominance of mainframe
computing. Since the mid-1980s, Sun Microsystems has been supplying Toshiba,
Fujitsu, and other Japanese vendors with its hot boxes. HP followed Sun's
lead a few years later, and now counts Hitachi and even NEC among its resellers.
Between them, Sun and HP pretty much rule today's Japanese workstation market.
In the overall IT scheme of things, this handful of examples hardly warrants
breaking open the victory champagne -- especially given that Japanese electronics
manufacturers have a lock on producing many of the key components and materials
that make IT go snap, crackle, and pop. Nevertheless, these efforts from
American firms buck an alarming trend that has seen the US manufacturing
base downsize to a dangerously low level.
The task for the American IT industry now is to build on these successes
and reverse its deathly decline in manufacturing and over-reliance on Asian
materials and components. As Singapore's Lee and other Asian (including
Japanese) leaders know so well, high-tech manufacturing is the royal road
to creating new jobs, new products, and national wealth -- not to mention
serving as an invaluable pool of skilled IT engineering talent for an industry
that will dominate all others in the next century.ç
In addition to writing for Computing Japan, John Boyd is the Tokyo correspondent
for InformationWeek and writes the weekly "Computer Corner" column
in the Japan Times, but he is otherwise available for hire if the fee is
fat. He detests e-mail, so you can bug him at 6840615@mcimail
.com, but don't expect an electronic reply.
(c) Copyright 1996 by Computing Japan magazine