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Officials Say Japan Will Agree To New Semiconductor Trade Pact

February 13, 1991

TOKYO (AP) _ Japan is willing to accept a new semiconductor trade pact with the United States, but will refuse to promise any particular share for foreign chips in the Japanese market, officials said Wednesday.

U.S. semiconductor industry officials asked Japan on Wednesday to pledge in any new agreement that foreign semiconductors will hold 20 percent of the Japanese market by the end of 1992. The current pact contains the same 20 percent target, which has not been met.

Trade officials from the two countries are to discuss semiconductor issues in Washington on Thursday. The United States asked last month for talks on a new arrangement for improving U.S. access to the Japanese market after the current agreement expires in July.

″Our position is very flexible and open to the American desires,″ said a Foreign Ministry official, who spoke on condition of anonymity. ″But while the substance of the current agreement will be maintained, the shape will be different.″

The current pact was signed in 1986 after the United States accused Japanese semiconductor makers of selling chips at unfairly low prices, a practice called dumping.

In the agreement and a controversial ″side letter,″ Japan pledged to stop dumping and work for a 20 percent share for foreign chips in its domestic semiconductor market, the largest in the world.

U.S. industry and government officials say the figure was a commitment, but Japan maintains it was only a goal.

″We have never made an official commitment to a certain market share,″ the official said. ″If the U.S. side calls for a market share of 20 or 22 percent, we will reject it. That is definite. We cannot say that a certain market share will be achieved.″

But the official said Japan was willing to promise in a new agreement to continue efforts to expand foreign market share.

Roger Mathus, director of the U.S. Semiconductor Industry Association’s Japan office, told a news conference the 20 percent figure in the current agreement had been a valuable tool in achieving increased sales for U.S. semiconductor makers.

Foreign semiconductor market share in Japan has risen from 8.5 percent when the agreement was signed to 13.1 percent in the third quarter of 1990.

Japanese companies’ share of the U.S. semiconductor market was 27 percent in 1989, according to the Semiconductor Industry Association.

American officials have acknowledged that U.S. semiconductor makers suffered in the past from inferior quality and did not make a sufficient commitment to the Japanese market. But they say that is no longer true.

Despite the semiconductor agreement, Japan has increased its dominance of the key memory chip market, and four Japanese makers said they plan to announce prototypes of 64-megabit designs on Thursday at a semiconductor conference in San Francisco.

The new chips, from Toshiba, Fujitsu, Matsushita and Mitsubishi, can store the equivalent of about 2,000 single-spaced typewritten pages of information, or 16 times as much as the highest-capacity chips now on the market.

″These are laboratory chips, not production samples,″ a Toshiba official cautioned. ″Production is still several years away.″

No U.S. chipmaker has announced it has developed a 64-megabit chip, which is two generations ahead of the 4-megabit chips that are the current highest- capacity chips sold.

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