JPRS ID: 9919 SUB-SAHARAN AFRICA REPORT

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000400080031-5
• Release Decision: RIF
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• Document Page Count: 62
• Document Creation Date: November 1, 2016
• Sequence Number: 31
• Content Type: REPORTS

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JPF~S L/ 10177 ,
- 10 December 1981
Ja an R~ ort
_ p p
CFOUO 70/81)
~
~
I
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w
JPRS L/10177
, 10 December 1981
JAPAN REPORT
(FOUO 70/81)
- CONTENTS
NILITARY
Moves Toward Creating Combat-Ready Organization I}iscussed
(Takashi Takano; EKONOMISUTO, 27 Oct 81) 1
ECONOMIC
J
U.S. Seeks End to Tariffs on 29 Commodities
(JAPAN ECON~4IC JOURNAI,, 24 Nov 81) 10
Discussion on Cutting Discount Rates
(Masahiko Ishizuka; JAPAN ECONOMIC JOURNAI~, 21~ Nov 81) , 12
SCIENCE AND TECHNOLOGY
~.ijitsu's Strategy To Surpass IBM I}iscussed
(SHUKAN ORU TOSHI, 16 Jul 81) 14
Discussion Held on IC Conflict With United States
(SHUKAN TOYO KEIZAI, 19 Sep 81) 20
U.S. Demand on Removing Tariffs Considered Unreasonable
(JAPAN ECONOMIC JOURNAI~, 2L~ Nov S1) 28
Steel Industry Sees Financial Crisis Danger in 1990
(JAPAN ECONaMIC JOURNAL, 24 Nov 81) 29
Seamless Steel Pipes Export Prices :~ise
(JAPAN ECONOMIC JOURNAZ, 2!~ Nov 81) 30
General Electric Machinery Makers Boost Expenditure
(JAF~IV ECONOMIC JOURNAL, 24 Nov 81) 31
New Minute Metal Particles Production I}iscovered
(JAPAN ECONOMIC JOURNAL, 2i.u Nov 81) 32
- - a - [III - ASIA - 111 FOUO]
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Sharp To Yroduce Visible Zight Semiconductor Laser
(JAPAN ECONaNlIC JOURNAL, 2!~ Nov 81) 33
Reagent Made for Measuring Molecular Weights
(JAPAN ECONOMIC JOURNAL, 24 Nov 81) ............o.~......... 31~
Potential of Defen~e Industry Examined ~
(NIKKEI SANGYO SHINIBUN, vaxious dates) 35
- b -
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MILITARY
- MOVES TOWARD CREATING COMBAT-READY ORGANIZATION BISCUSSED
T~kyo EKONOMISUTO in Japanese 27 Oct 81 pp 26-31
[Article by Takashi Takano]
[Text] While unrealistic defense discussions dazzle the public,
uniformed officers of the Defense Agency are steadily marching
toward the "combat-ready military," that is, "Japanese Armed
Forces." What makes this move possible?
"Combat-Ready" Organization
News that a consortium of three companies, Zenitaka-Gumi, Tokyu Construction and
Oki Construction, was the successful bidder for the main construction work for
the "Central Command and Control" of the Defense Agency held on 22 September was
very casually reported. It may have been the "everyday sensitivity" of the pre~s
club at the Defense Agency that allowed this indifference in reporting the news--
the view which regards as rather unnatural the lack of a joint command and
control center uniting the three branches of the Self Defense Forces, when the
Self Def ense Forces are about to co~it themselves to accept a military share
in Asia in line with the "Japan-U.S. Alliance" formulated by Suzuki's visit to
the United States. However, this issue is deeply related to the qualitative
changes associated with the postwar history of the Security Treaty and the Self
Defense Forces, which will probably confront a decisive turn in the mid-1980's.
The purpose of the Central Co~and and Control is none uthex than unilateral
information gathering and servicing operations and transmission of orders by
means of linking "Defense Microcircuits," that is, the communications network
of the Ground Self Defense Force, the "Self Defense Fleet Co~and and Support
(SF) System" with the Self Defense Fleet Command in Yokosuka as its center, a~d
the "BADGE System" of the air Self Defense Force~ The control room, equipped with
a large screen that displays movements in the three forces, is of course
connected by a hot line to the operations and commnand room of the Yokota
Command of the U.S. Armed Fo~.^es Japan. If necessazy, it will request the
_ presence of American generals and function as the 3oint operations center in
cooperation with the U.S. Armed Forces in the Far East.
In short, onl;~ after the completion of the construction of this small building
of two floors abovegraund and three floors below ground, to ~e built at a nominal
1
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1~()R ()FF'1('1:1I. I~CF. ()Nl.l'
cost ~~f 9 billion yen in the compound of (the Detense Agency) in Hinoki-machi, will
"really combat ready" Se1f Defense Forces b.: born for the ffrst time.
- It is quite outside the co~mnon sense of military practice to enter into combat
actions that influence tlie destiny of a nation without having any setup for the
= joint use of three military forces. In reality, the Se?f Defense Forces, which
started as the National Peace Forces, or more frankly, forces to guard the bases
after the U.S. Armed Forces Japan left for the Korean front, do not have a function
or a system to join these three forces.
For example, taking a Iook at one of the exercises, the tank division of the
- Ground Self Defense Force, which courageously runs through the wasteland of
Hokkaido, repeats exercises that only scratch the surface with the utmost effort,
without being linked to the command of the air and ground cover by the Air Self
Defense Force fighters. Or, similarly, air cover cannot be hoped for when t:ae
Marine Self Defense Force trains for antisubmarine attack.
The reason is simple. The training areas of the Ground, Marine and Air Defense
For.ces are t~o far apart to conduct a joint exercise. However, essentially it
proves that the Self Defense Forces are "junior" military which lack a 3oint
system for the three forces.
- However, the Self Defense Forces greatly overcame that disadvantage in the e:xer-
cises last July. That commendable event was the 3oint maneuver staged on ~iorthern
Kyushu, which commanded a forced landing of a 10,000-man Grosnd Self Defense
rcfrce unit on Tsushima Island by sea and air to counter an atr raid on Sasebo
Port and on cargo ships by enemy aircraft, supposedly an "Emergency on Tsushima"
--actually an emergency in Korea.
It is not only because this was the largest full-scale joint manuever to date
_ that attracted our attention. We must acknowledge that it was the first maneuver
~ in history "directly commanded by the chairman of the Joint Staff Cc.~uncil" and at
the ~ me time it was actuall}r conducted in concert with the exercise held in the
Sea of Japan by the American and Korean navies and the drill to seal Tsugaru and
the Soya Straits held by the U.S. Armed Forces.
These deployments of units and cooperative operations with both American and
Korean armed forces are precisely programs that can be facilitated ~.i a full
scale only after the inceptton of the Central Command and Control in 1983.
If that is how things are shaping up, a critical obstacle will emerge. Who is
the commander to be charged with unilateral power to manipulate the ~oint Self
Defense Forces in conformity with a real war? In other words, who sits i� front
of the operations board at Central Command and. Control?
A11n to Fil.l the "Vessel"
From the standpoint of common sense, none other than the chairman of the Joint
Staff Council, standing above the chiefs of staffs of the Ground, Marine and
Air Self Defense Forces, should be the appropriate candidate. In fact, Chairman
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Yada of the Joint Staff Council took "command" in the Tsushima maneuver. However,
a delicate nuance is woven into the wording "command." Actually, the chairman of
the Joint Staff Council is not entrusted with authority to command and order.
In other countries, usually the chairman of the Joint Chiefs of Staff or the
chief of the Joint General Staff is at the top of the uniformed officers and is
authorized to take the great responsibility of leading the actual command of
the three forces immediately under the commander in chief.
The Self Defense Force Law, hoc,iever, provides: 1) the prime minister has the
. supreme command and control power of the Self Defense Forces (Article 7); 2) under
that authority, the minister of state for defense has general control of the
duties of the Self Defense Forces (Article 8); and 3) the three chiefs of s~.aff of
the Ground, Marine and Air Self Defense Forces execute orders given to the
respective forces by the minister of state for defense (Article 9). It does not
; mention the chairman of the Joint Staff ~ouncil anywhere. It is only in Title
Paragraph 2, Section 1 of the Defense Agency Law that the chairman of the Joint
Staff Council is for the first time provided for. The content of the provision,
in one word, is no more than "coordination" for the three chiefs of staff.
That can be interpreted, although it is rash to go so far, that tFie chairman
of the Joint Staff Council can only "coordinate" when, in a time of emergency,
the three chiefs of staff authorized to execute the respective orders given to the
Ground, Marine and Air Self Defense F~rces are engaging in a fist fight over the
deployment of operations and transfer of units in front of the helpless minister
of state for defense, who does not have a military background. The authority to
~ command al:~ �^rces directly, jumping over the heads af the thrae chiefs of
staff, js ~ot necesr;arily clearly delegated to the chairman.
- It is natural that the uniformed officers consider it impossible to engage in
a war in this c:!rcumst^nce. After the "vessel" c~lled Central Command and
, Control is created as an accomplished fact without any serious debate in the Diet,
[he inevitable problem will be: what shall be in that vessel? Chairman Yada
himself said to the press at the time of the previous Tsushima manuever: "A
queseion regarding the authority of the chairmsn of the Joint Staff Council will
come up sooner or later."
In other words, this is a question of establishing a military command system.
In the military of any country, usually the two systems, military administration
and military command, a.re set up inparalle. However, in the case of the Self
Defense Forces= a military adtninistration headed by an administrative vice
minister has been established, but the position of the chairman of the Joint
Stafi Council, the supreme post of the uni~ormed officers, is ambiguous as
described above. The chairman lacka power and authority to the extent that there
may be some cases where only the three chiefs, but not the chairman, are invited
to parties given by foreign embassies and consulates, but not the reverse.
That suggests that the military command system is "incomplete." The complaint
often voiced against "civilian control,1� i.e., against domination of the Self
Defense Forces by the bureaucrats in mufti in the intra-ministerial bureaus of
the Defense Agency, after a=1, comes down to a demand for designing the
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F'c1R t1~'F'1('lal t'~F' ct\t l
establishment of a military command system headed by the chairman of the Joint
Staff Council through upgrading the position of the chairman in parallel with the
administrative vice minister.
That means that they demand a complete system which upgrades the Self Defense
Forces so they may be suitably called "Japanese Armed Forces."
Reform of Z~ao Defense Laws?
To this effact uniformed officers are repoitedly anxiously devisiag the first
major reform of the two fundamental defense laws, the Self Defense Force Law and
the Defense Agency Law, since the laws became effective, with the reform to be
completed before next fall so as to be in time for the initiation of the Central
Command and Control scheduled for September 1983. Or, prior to that, ~here is a
possibility that even the Second Special Investigation Committee may make a
radical proposal for upgrading the Defense Agency to a Defense or a Ministry of
National Defense.
- At the meeting of the second subcommittee of the Special Investigation Committee
held on 6 OctoUer, former director Osami Hayashi of thE Bur~au of Legislation, who
is also one of the nine members of the Special Investigation Committee, attracted
attention by stating: "The D~fense Agency is heterogenous as an external bureau
of the prime minister's office. It should be established as an independent
ministry." Member Ryuzo Sejima and consultant Chu Ito, also of thE Special
Investigation Committee, stood out f.or a study on the creation of a ministry
of national defense in their article supporting the proposition, "Ways to Defend
Japan" by the "Japan Strategy Research Center," to which they serve as advisers.
Recalling that the director of the Administrative Management Agency i~ Yasuhiro
Nakasone, who once defended the same issue in the Diet when he was serving as
minister of state for defense, it is considered quite possible that the report
- of the Special Investigation Committee to be submitted in the middle of next year
will dish it out once again.
There is no doubt that the "Ministry of National Defense" to be established in
that case would not be the current Defense Agency with a new title, but that a
new dimension would be added to its qualities, including the establishment of
" military command.
Look how the pursuit of military consolidation by the career military officers
originated from a simple and naive apprehension--we cannot fight a war in this
condition--often biiilds up to an endless ambition.
Indeed, there are same grounds behind the complaint from the uniformed officers
that there is no such thing as "civilian control" in Japan, but only an infes-
r.ation by politicidns who are after the defense concessions and by ignorant
bureaucrats inmufti sent to "serve for 2 years" against their will from other
first-class government offices.
~
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Then, the question to he raised is how to establish "civilian control," which
serves as an institutional guarantee to subordinate military matters to politics
and diplomacy. What is at issue is, of course, not to demolish "the civilian
control" itself by the consolidation of the uniformed officers' power.
Uniformed officers of the Self Defense Forces now appear to be stealthily starting
to challenge the "civilian control" itself by creating a small "vessel" cal~.ed
Central Command and Control with the admixture of a mild sense of antagonism
likely to be seen in any government officials disguised as discontent with the
internal high-handedness and ignorance, and an endless desi~'e for "consolidation"
as military technocrats.
This movement seems to be a more serious matter that affects the future caurse
of our nation than the anxiety over a small increase or decrease in the defense
budget, but the "civilians" themselves who will be directly affected are hardly
award of the problems that are being posed. This "mild coup d'etat," ~ontrary
, to expectations, may succeed smartly in the political c'_imate of Japan, where
nobody wants to take responsibility for the defense policy in its true sense.
This process which fits the description of a"mild coup d'etat" is going on
parallel to the process of "mild reform of the Security Treat;~" started by
mutual consent in November 1978 with the "Japan-U.S. Defense Cooperation Guide-
lines" for discussion of details of the Japan-U.S. Joint Operatior~al setup in
case of an emet~gency in the Far East.
It is still fresh in our memory that Kurisu, then chairman of the Joint Staff
Council, was in effect dismissed from duty because of his statement in .Tvly 1978
that "the Self Defense F'orces will go beyond the rules and regulations in counter-
ing a surprise attack," when it had already been disclosed that these guidelines
requested that the self defense forces play the role of a ready war potential
- force in case of an emergency in the Far East beyond the duties of the Self Defe
Defense Forces prescribed in Article 3 of the Self Defense Law, "defend our
_ country aga.inst direct or indirect invasion"; beyond the provision for Japan to
' share "exclusively defensive defense" in Ar~icles 5 and 6 of the Security Treaty
of 1960; and of course far beyond the concept of Article 9 of the constitution.
Kurisu's Fully Calculated Statement
That statement mesnt the start of psychological operations with the effect of
shock treatment to appeal t~ public recognition that the conventional setup of
the Self Defense Forces "is no longer workable," seeing that the direction shown
by the guidelines is finally about to be realized. Simultaneously, on the other
side of the coi~:, it was the igniter of open rebellion by the uniformed officers
against the intra~ministerial bureaus. In the era of Director General Osamu
Kaihara of the Secretariat of Minister of State for Defense, who was called
Emperor Kaihara, (he l.3ter served as chairman of the r?ational Defense Council),
the intra-ministerial Lureaus literally had absolute control (allow me to inter-
ject that this and civilian control are not the same). However, the uniformed
officers' power, especially those of the Ground Self Defense Force, has been
slowly but steadily creeping upward since then.
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au~: u~ r i.~t. t;~~ uv?.~
In any case, because the Ground Self Defense Force has lots of inen, it can send its
men to many posts. The Ground Self Defense Force holds responsibility for
administering practically all of the Self Defense Forces' prefectural liaison
offices, which carry out recruiting--which is the greatest headache of the Self
Defense Forces. Therefore, it has even become the course to success in the Ground
Self Defense Force to be appoint2d to the post of the director, particularly at
the Fukuoka Prefectural Liaison Office, which achieves the top score every year.
The big household of the Ground Self Defense Fcrce always talks, for instance,
when mobilizing for events and when shuffling the number of inembers due to a
budget cut.
Moreover, the Ground Self Defense Force assigns old sergeants without a place to
go to the "supportive part" of the Self Defense Forces, such as patrol units within
the Self Defense Forces, investigation units and auxiliary organizations, by a
method that "transcends rules and regulations" called "action" in their term.
It is said that the existence of the Special Section of the Second Division of r_he
Ground Self Defense Force, which was sought by AKAHATA as a"shadow military," was
- not known until reported in AKAHATA to the intra-ministerial bureaus of the
_ Defense Agency or ever~ to the Marine and Air Self Defense Forces.
With the ballooning of such a"supportive role" controlled by the Ground Self
Defense Force, it would be easy for an investigator to follow an elite bureaucrat
and take a picture of him with his arm around the shoulders of women in a
cabaret. I do not know whether there taas ever been an incident where the Ground
Self Defense Force threatened the bureaus of the Defense Agency actually using
that kind of Photograph. However, such a capability of the Ground Self Defense
Force already known to the Defense Agency and the Self Defense Forces is undoubt-
edly at work as a kind of intimidating pressure on the intra-ministerial bureaus
Of course, the inside of the big household of the Ground Self Defense Force is
- not at all consolidated into a single interest group, as seen in the speckled
patterns of people from the former Ministry o: Ho�~me Affairs, particularly those
from the National Policy Agency, foriner Imper~al Army officers, and former
Imperial Navy.officers in addition to an independent power from the Defense
Academy, which produced major generals from its fiist graduates. On the contrarl~,
- they must pass through fierce competition just to be selected for the "Comanand
Staff Course," equivalent to the "graduates of the Military Staff College" of the
old days. In the present condition, they must be ready for more relentless
string-pulling in order to finish the course and get a higher post. However, it
. is a fact that the weight of the Ground Self Defense Force as a whole is steadily
consolidating its power of speech.
Chairman Kurisu, w}~o appeared on the stage in front of such a backdrop, exgressed
unabashed hostility to (then) Vice Minister Mai:uyama from the National Police
Academy who belonged to Kaihara's group, perhaps tinged with a superiority complex
unique in the bureaucratic world because he himself was a graduate of the Law
School of the University of Tokyo. While he was in that office, he often went
"beyond the rules and regulations" by offering his opinions directly to the
- minister of state for defense, bypassin~ the vice minister. We11, that could
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be interpreted that he carried out his belief in the balance between military
administration ~nd military command. Kurisu's "explosive" utterance was issued
rather on the basis of a thorough calculation as the grand finale of these
esoteric struggles.
The intra-ministerial bureaus successfully dismissed Kurisu, giving an inadequate
reason of "challenge to civilian control," but they had to recognize the necessity
of studying legislation regarding emergencies as advocated by Kurisu. T'he case
was closed giving uniformed officers the substance while taking away the honor.
It was 2 days after Kurisu was dismissed that then Prime Minister Fukuda instructed
that a study on emergency legislstion be conducted.
Infestation of Phantom Defense Argument
Since then, as everyone knows, campaigns for emergency legislation~ and a boom in
arg�ing about threats from the Soviet Union crying, "the Soviets ar.~~ cotning to
Hokkaido tomorrow," were produced with Kurisu himself, who was put to pasture, as
convincing talent.
Although I do not have time and space to discuss the history point by point, the
"Hoddaido Defense" theory advocated by the Ground Self Defense For~e is, in a
nutshell, nothing more than a strange mixture of the fantas3r of science fiction
and the "Go North" theory of the former Imperial Army--tihe Siberia Advance theory.
The "Sea Lane Defense" theory loudlg proclaimed by the Marine Se1f Defense Force
in competition to the "Hokkaido Defense" theory is also only a deformed relic of
the antiquated combined squadron concept of the former Imperial Navy. I wonder
why such a"Defense Ar.gument," which nobody seriously believes in when personally
' discussing it with executive officers of the Ground and Marine Defense Forces, is
amplified by the irresponsible mr:ss media and is prevalent with a haughty air.
Well, speaking f rom the side of the uniformed officers, they mus~ be letting it go,
considering it a plus for getting a better defense budget, to see the campaign
drumming or the boom rampaging, whatever it may be, as long as it helps the Self
Defense Forces themselves to be widely rECOgnized.
However, when one asks the opinion of the executive officers who graduated from
the Defense Academy, they all criticize the Kurisu style, idea and method as
"romanticism of the old generation from the former Imperial Military." That
does not mean that they have the capacity and spirit to turn the defense policy
discussion into something more substantial and practical. All the "real" soldiers
who have actual combat experience are already gone, even among those from the
former Imperial Military in tre Self Defense Forces. In 5 years, none of the
remaining nominal soldiers f rom the former Imperial Military will remain. S~me
may think optimistically that the manner of discussion will be more praGtical
after that, but I am afraid that is too optimistic.
The recent phantom "Defense Argument" is destined to be gone before long. How-
ever, the program for making the "Japanese Armed Forces" out of the Self Defense
Forces--the main track installed by the generations of the former Imperial
Military exerting the last drop of their energy--will surely be continued in the
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hand5 of the postwar uniformed executives led by those who graduated from the
Defense Academy, because this pcogram has its own flavor of "military consolida-
tion." '
- The problem is the "civilian" side which should control it. Eve:~ now there are
a group of anachronistic people who would shed t-ears in front of others saying,
"the constitution was imposed upon us by America," who holds the central power
_ among the group for national defense and the group for reform of the constitution.
Also, there are a group of people called the "Security Treatp Mafia" among groups
of people traditionally friendly to the United States in the Foreign Ministry.
Immediatel.,y after the mutual agreement was reached on the guidelines in 1978,
they organized a"Security Treaty Policy Planning Committee," ~lacing current
Ambassador to the Soviet Union Takashima, then defense counsellor, at its axis,
which continues to study the security treaty policy of. the eighties in coremunica-
tion with the executives at the Defense Agency.
Furthermore, the Japan Socialist Farty, which is allegedly even more to the
"right" than the Liberal Democratic Party, including the executives of United
Labor which cry for "realization of weapons exports for higher wages," forms a
hawkish bloc of "civilians." The conservative mainstream of today stems from
the Suzuki and Miyazawa line, and the ma~ority o� the business and financial
world still do not choose the road to a military superpower through reckless
expansion of the military. Rather they are fully aware that the greatest factor
contributing to Japan's growth and remaining power for innovation in a time when
_ the world is in recession, is the very fact that after the war Japan was lucky
enouth to have been able to adhere consistently to a relatively conservative
military expense burden, even though America calls us a"free rider" or whatever
it wants to call us, for that matter. For example, Director General Kiichi
Miyazawa of the Secretariat of Minister of State for Defense, who is considered
to have best inherited the Yoshida-Ikeda lineage, asserted the following in a
lecture he gave this past January.
"There is a background of its own in the creation of a constitution such as
this. Furthermore, the number of people who have been raised under the
cunstitution has already reached more than half af the population of our country.
In view of. this, there are matters that cannot be reversed. In the history of
mankind, there is no country which has survived upholding such a constitution.
This is the first such great experiment, so to speak, of human history." (Yomiuri
International Economic Roundtable ConferenceJ
_ In addition, Miyazawa clearly acknowledged the presence of a ~plit over this
point in the Liberal Democratic Party, and affirmed that Prime Minister Suzuki
definitely stands for the protection of the constitution. Nonetheless, when
Prime Minister Suzuki, who maintains this stand, visited the United States, he
was easily taken on a ride. He agreed to the "Japan-U.S. Alliance" proclamation
prepared by the "Security Treaty Mafia" of the Foreign Ministry conspiring with
the Defense Ag~ncy and promised ta share a military role in the Far East based upon
- the proclamation.
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i~(1R (N~H'1('lAl. t�Cl�: nNl.l'
~
Problematic Civilian Side
In summation, the "civilian" side which should control the trend of defense policy
and the uniformed officers is divided into a hawkish bloc which is distantly
dissociated from reality, a moderate but wln~~rable conserv~tive mainstream, and,
~n addition, absolutely powerless opposition parties. A discussion, no matter
where it might take place, relating to the strategic choice about to be pressed
upon Japan in the eighties whether it likes it or not, will never be honestly
pursued. ~
= In this sense, it is indeed none othe-r than "civilians" who deffiolish "civilian
control." Since it is as it is, we can easily envisage the civilians getting on
their knees in front of the mighty "military consolidation" sought by the uniformed
officers, who are closing in on them with piles of established facts.
Director Nakasone of the Administrative Management Agency once described his
resolution for an administrative reform as follows:
"According to tha encouragement by the leading national policy planner (I~azuo)
Yatsugi, we must consider the Mei~i Restoration as the first renovation and the
loss of the war as the second renovation, and we must succeed in forging the
present administrative reform into ~.he third renovation. Former Prime Minister
Shinsuke Kishi also inspired me the other day, when he said: 'Administrative
reforms are almost impossible. They are achieved, it is said, only by a coup
d'etat or an internal uprising. Please brace yourself in doing so.' Admin~.stra-
tive reform aims at attaining a structural reform and a functional improvement
in all areas of national defense, education, welfare and finances" (lecture
presented at the meeting of the Society for the Study of National Policies held on
27 July).
The administrative reform extending over the political and financial worlds can
be considered to have veered from its original purpose, but it has begun to take
on the color of a plan to remodel our nation from above in the direction of a
"combat-ready national structure" entailing the creation of a Ministry of National
Defense.
If this national remodeling plan handed down from above succeeds in docking with
. the making of "Japanese Armed Forces"--a program pursued by the mild coup
- d'etat--the combined force wi11 surely insure "the third renovation." It is
- because of this possibility that we should not overlook the quiet article
concerning the bidding for the construction of the Central Command and Control.
COPYRIGHT: Mainichi Shimbunsha 1981
8940
CSO: 4105/20
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- ECONOMIC
U.S. SEEKS END TO TARIFFS ON 29 COMMODITIES
, Tokyo JAPAN ECONQMIC JOURNAL in English Vol 19 No 982, 24 Nov 81 pp l, 19
[Text]
The U.S. Government last While Washington already after Fujitsu Ltd., and its sukr
week submitted a request to has suggeated an agenda d 21 sidiary in Japan, IBM Japan
Japan asking that it swiftly do points to be taken up at ttle Ltd., imports a considerable
away with tariffs on 29 prod- trade graup meeting concerned , amount of finished products
ucts and rectify non-tariff bar- with liberalization of Japan's and parts from the [J:S. ~
riers, such as by simplifying market, such as with regard to Actually,~Japan has~been ru.r,-
import procedures. The repre- high technology, lowering' of ning a deficit in computer t: ade
sentation, in writing, was con- tariffs and abolishment of im- with the U.S. According'io the
veyed to the Japanese Foreign port quotas for farm prodncts, Finance Ministry. Japarls im-
Ministry by William Barra- the ~letest request particularly ports of computer mai;~frames
clough. minister at the Ameri- concenlrates on tariffs and nbti- and peripherals fron~ the U.S.
can Embassy in Tokyo. tariff barriers. last year totaled ~ 152,889 mil-
In its latest request, the U.S. Its key feature is that it re- lion. The import value wa~
said to have urged Japan to fers to specific commodities, about five times larger than Ja-
- r.duce its tariffs for computer and takes u com uter-related '
mainframes, peripheral equi~ p p pan s such exports to the U.S.
tariffs from the very outset. ~See related story on Page 9. )
ment, auto parts, plywood, As for this phase,. Japan now If tariffs in this area are
- lumber and grapefruit to nil, imposes a tariff of 10.5 per ceqt eatl lowered or reduced to
and to have proposed incorpo- ~ 3'
rati this in the external eco- on the mainframe of computers zero, IBM's competitiveness
~ and a 17.5 per cent tariff on within Ja n further is
nomic measures which the Pa Bo~?~B ~
peripheral equipment. The cor- ;ncrease and this also is
.lapanese Government intends responding U.S. rates are only ' g01Dg
to announce shortly. 5.5 er cent for both classifica- Bi'eatly to favor other large
At the same time, the U.S. p American makers, such as
tions. The U.S. wants Japan to spe~y_Univac, they holc~
proposed having its request abolish its tariff directed at it.
taken up for discussion at the Ja anese com ter arters, , In the Tokyo Round of multi-
two-da meetin of the Ja n- p ~ ~ lateral trade negotiations, Ja-
Y 8 Pa however, are already deepyy pan pledged to reduce tariff on
U.S. Trade Group to be held in alarmed by the U.S. request,
Tokyo on December 9-10. statin ,"If this is done, Ja a- computer mainframes to 4.9
The U.S. Government was g p per cent and that for peripheral
known to be strongly pressing nese ' makers are going ~ to, be equipment to 6 per cent by 1987.
Japan to make concessions on dealt a devastating blow. It is believed ~that the U.S.
the points that it has enu- These quarters cite, that now aims at getting Japan to
merated on the grouncls that International Business Ma� reduce the tariffs to zero at
the one-sided imbelance in chines Corp., Americe's top once or, if it cannot, to have it
bilateral trade in favor of Ja- computer makee, now has the advance the date of its tariff
pan was sorely straining Japa- second larges4 share of the reduction.
nese-American relations in domestic computer market
general.
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Up to this time, the U.S. fre- In addition to this, the U.S.
quently has asked Japan to already has been pressing for ,
open its market to products of realization of eight "demands,"
high technology. As a result, such as a review of the agre~
the two governments only re- ment on prceurements by the
cently reached agreement on Nippon Telegraph dc Telephone
- advancing the tariff reduction Public Corp., other agreements
goal for integrated eircuits set on tobacco and leather gooHs,
in the Tokyo Round, that is, to and mat.ars pertaining to
4.2 per cent by 1987, to April, decontrol of the servlce afnd
next year. The government financing 6elds, and . inveat-
quarters here thus feel that ment. ~
the U.S. this time has turned
the foeus of its attention to wio- carecno~: No~ertro.r � ~swe,
ning a fresh concession in the a~oraflom for ffe~l fheeh and platfs
were revers~d. ~
computer field.
1n the latest U.S. move,
Washington also wants Japan
to reduce to nil tariffs for farm
products coming under quotas,
such as grapefruit. Last month,
U.S. Agriculture Secretary
John Block sought a review of
- such quotas when he visited Ja-
pan. It now appears that the
U.S. will take up this issue and
also press for an abolishment of
tariffs at the December trade
group meeting.
The U'.S. also has come out
strongly this time to seek a
drastic review of non-tariff
barriers, such as: � 1) speeding
of customs procedures in gen-
eral; 2) simplification of tn-
spectior. and standards relative
to plywood, autas, processed
foods and cosmetics; 3) revi-
_ sion of quarantine regulatior~
as to animals and plants; 4) re-
cognition of American baseball
bats, tennis balls and other
sporting goods by private Japa-
nese sports organizations.
COPYRIGHT: 1981, the Nihon Keizai Shimbun, Inc.
CSO: 4120/73 ~
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1~l)N l)b'N'I('tAl, IItiH: ()Nl.l'
1:C1) NUPi IC
DISCUSSION ON CUTTINC DISCOUNT RATES
- Tokyo JAPAN ~CUNOMIC JOURNAL in English Vol 19 No 982, 24 Nov 81 pp 1, 2
_ [Article by Masahiko Ishizuka: "Discount Rate Cut Looms as Near-Term Possibility"]
[Text ]
Argument for a discount rate Hut as the U.S. interest rates According to government
cu: in the immediate tuture started falling recently, the yen economists, the real economic
somewhat suddenly gathered rose sharply on the Tokyo for- growth in the third quarter
momentum last week as the eign exchange market, to 219 to mast likely ended up at an an-
yen's value soared against the thedollaronFriday, thehighest nual 2-3 per cent rate and up 1
U.S. dollar, while domestic since late May, and was viewed per cent from the Freceding
_ business recovery continued likely to continue to strengthen. quarter. The l~ggin rowth
- lagging and trade surplus kept A leading advocate of a dis- rate is attributei; to weakness
swelling placing Japan under count rate cut, Economic Plan- of domestic demand, ~'iarticu-
- inc; easingly vociferous attacks ning Agency Director General larly personal consumption and
from Europe and the U.S. To- Toshio Komoto last week housing, while it is being made
w~ard the end of the week it ap~ reiterated the urgency of an up for by strength in overseas
peared that officials of the early action, saying, "It is de- sales.
Bank of Japan and the Ministry sirable to stimulate the Recently, there are signs that
of H'inance had started weigh- economy through lower interest the pace of expansion of ex-
inR ttie timing of a discount rates." ports and private capital in-
ratc~ cut. which could c~~me in Stimulation of domestic de- vestment, the two major forces
(~c~ce~mber or January. ~See mand is being urged as a that have led the growth of the
nn.~h�sis ~~n Page 10.i means of spurrinqslow imports Japanese economy in the past
1'herc t~d been an undercur- caused by weak demand for year, may be losing momen-
rent of demand tor lowering the materials and other goods, tum. Some government offi-
Bank o[ .lapan's diseount ratc, I.agBing imports are held r~ cials and businessmen are even
at t;.�!~i per cent sinc~~ last spoasible for the swelling trade beginning to be concerned that
blarch, l~ut it had been held surplus as much as strang ex- the business recovery underway
I~~ck due to the persistenr~~ of por~~ are. The current account may falter.
higt~ interest rates in the L`.S. surplus in fiscal 198] is now People who are cautious
th;~t kept the Japanese yen estimated co reach S10 billion or about a discount rate cut warn
�cak I'or months. Will~ the more, compared with the ~7 bil- that a lower interest rate would
~n�ice~ front cuntinuing marked- lion in the Government's two- work to weaken the yen and as
ly calm at a time when domes- month old revised outlook and a a result boost exports, adding
tic demand recovery is ex- deficit of $6 billion in the origi- to the current account surplus.
rruciatingly slow, those who nal projection. But whether this turns out true
fa~~or an early discount rate cul depends on the extent of the fall
citeci the level ot U.S. interest of U.S. interest rates and, more
rates and the result~nt weak
yen as the only stumbling
block.
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essentially, strengthening of
the Japanese currency.
While officials of the Bank of
Japan and the Ministry of
Finance last week generally
voiced prudence, citing
necessity to watch the trend of
U.S. interest rates tor some
time, Finance Minister Michio
Watanabe drew attention by.
saying Thursday that he would
like to see tax revenues grow
"through stimulation of the
_ economy." His remark was
interpreted as implying lhat he
was leaning toward a discount
rate cut. Bank ot Japan Gov-
ernor Haruo Mayekawa, mean-
while, merely said that he
would closely watch various
economic indicators for the
. time being.
International Trade & Indus- .
try Minister Rokusuke Tanaka
and Japan Chamber of Com-
merce & Industry President
Shigeo Nagano came up with
an outright endorsement of an
early discount rate cut. Nagano
- made specia~ reference to the
stagnant stale of smaller enter-
prises, whose interest his or-
ganization represents. With
business failures topping 1,500
in October, the situation requ'ir-
- ed an immediate reliet, he as-
serted.
COPYRIGHT: 1981, the Nihon Keizai Shiffibun, Inc.
CSO: 4120/73
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- SCIENCE AND TECHNOLOGY
FUJITSU'S STRATEGY TO SURPASS IBM DISCUSSED
Tokyo SHUKAN ORU TOSHI in Japanese No 451,16 Jul 81 pp 54-59
[Text] We cannot discuss Fujitsu, the standard bearer of "Rising Sun" [i.e., Japanese]
computer, without mentioning IBM.
The super giant IBM, holding 60 percent share of the world's computer market, is
~ called the sun of the computer world. Repeatedly in the past, a number of planets
which surround it has challenged its authority only to retreat in defeat. But at
- the head of the planets which continue to mature despite the glare of the sun and
whose existence can no longer be ridiculed, is the steadily rising Fu~itsu.
In support of this is the symbolic "incident" when Fujitsu, confronting IBM directly,
won the bid to [install computers] for Australia's Bureau of Statistics. At one
point the bidding developed into a political issue, and despite the strenuous effort
- by chairman Cary of IBM, Fujitsu finally.won the battle in November 1979.
At about the same time, Fujitsu succeeded in "replacing" IBM machines in Brazil.
Fujitsu's M-200 Series was installed for the savings and loan systems of the largest
bank in South America, the Bank of Bradesco. In 1980, both the National Bank of
Brazil and Bank Auxiliar introduced Fujitsu's machines, thus creating a kind of
avalanche effect. These successes are proof that Fu~itsu's technology has caught
up with IBM's, that time has come when it can compete on equal terms with IBM, on
overall capability from "cost performance" tp maintenance service.
New Super Large Computer, Faster Than IBM's
One condition which enabled Fujitsu to confront IBM directly is that its OS (operation
' system) is coterminous or interchangeable with IBM machines.
OS refers to the most basic software that drives the hardware. All the computer
- manufacturers are developing their own OS. Based on OS, users are developing soft-
- wares (application soft) that operate machines appropriate for their actual business
needs. When an old machine must be replaced, a different company's machine can be
introduced as long as the OS can utilize the new machine existing "application." This
is called "compatible machine."
Fujitsu chose to develop IBM compatibles. This choice was based on the view that,
"When one tries to enter the world market, one must concentrate on IBM users. This
is the ticket that allows him to enter into business negotiations overseas. Let the
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machines be compatible with IBM's. This will create choice and eliminate the un-
healthy effect of IMB's monopoly. All of this is good for the user." (Yukimaro
Kawatani, director of Sales Promotion Headquarters)
The turning point at which Fu~itsu decided to move into [IBM compatible] development
came at the time of 1971 indiistry reorganization. In 1970, IBM introduced tl}e large-
scale 370 Series and began the offensive. At the time the import of computers was
partially liberated (complete liberation came in 1975) and this put the future of
Japanese computers in doubt. It was then that MITI stepped in to re~rganize the
computer industry, subsidizing half the capital needed to develop a counterpart to
IBM's 370.
Nippon Electric - Toshiba and Mitsubishi-Oki groups chose not to develop IBM com-
- patibles. Fujitsu, ~n tie-up with Hitachi, did. The project, requiring a total
investment of 160 billion yen, was indeed a gamble with Fu~itsu's future at stake.
The person responsible for the entire project was Takuma Yamamoto who became president
this July.
' In 1974, Fu3itsu finally came out with the M Series, conpatible with IBM's OS,
but superior to it. Thus began Fujitsu's offensive as Japan's all-purpose computer
specialist.
In the meantime, there was an encounter between Dr Amdahl and Toshio Ikeda, the late
computer specialist of Japan. Because of this meeting, Fujitsu participated in the
capital =ormation of the newly established Amdahl Corp. This cooperation led to a
joint development and manufacture of "plucon machines" (Operating by simple replace-
ment of plugs). This technology proved beneficial for Fujitsu in various ways.
With the introduction of M Series, Fujitsu's replacements of IBM machines foilowed
in succession. The M-200's cost performance is said to be 2-3 times higher than
IBM 370's.
Including this rI Series, the share of compatible machines in t~e world's large scale
machine market has grown to 10 percent. ~
The super giant IBM's evaluation of Japanese computer manufacturers is high; in its
shareholders meetings it has made statements indicating its awareness of the rise of
Fuj itsu.
In fact, it is said that with the appearance of compatible machines, IBM's service
~ has improved. It is also said that with the two bender system which can be used
alongside the IBM machines, competition is born and this has mitigated the ill-effects
of IBM monopoly.
On the other hand, IBM failed to develop follow-up machines to its 370 Series which
it had planned to introduce in 1976-77. In order to stop the flow of users to
plucon machines, it introduced 303X Series. But this had nothing technologically
new, and only served to fill the gap prior to its H Series. Moreover, the performance
of H Series has not caught up with that of M-200 of 3 1/2 years ago.
Having shown the world its excellent hardware technology through the development of
IBM compatibles, this May, Fu~itsu introduced the world's fastest all-purpose large-
scale computers M-380 and M-382.
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The processing speed of M-380 is 24 MIPS (Million Instruction Per Second), a threefold
increase from the M-200. It, moreover, surpasses 15 MIPS of Nippon Ekectric's ACOS
1000 and 10 MIPS of IMB's 3081 (per 1 processor).
Challenges World Market with Technological Strength
It is Fujitsu's semiconductor technology which makes this world's fastest computer
possible. According to Kawatani, "The greatest weapon for computer manufacturer is
logic sE~.miconductor. In this area Fujitsu's technology is second to none." As thg~e
words indicate, the speed of logic LSI for M-380 is 350 pico second (1 pico = 1/10
In comparison, the speed of Hitachi's M-280 is 450 pico second; that of IBM 3081,
1,000 pico second.
Furthermore, in the area of inemory, Fujitsu led the world in developing 64K RAM
(64,000 pieces of data can be written in and read out). In comparison to IMB's model:,
Fujitsu's is 20-30 percent smaller in ~ize, and power consumption, 30 percent lower;
it is a high performance semiconductor.
The advanced technology developed in the area of LSZ has blossomed in other areas as
well. For example, there is the new transistor HEMT (Super High Speed Semicanductor
Element).
According to Kawatani, "It was the spirit of challenge which enabled Fujitsu to
develop the LSI first. No one thought it possible. We are now reaping the benefits
of that spirit."
In comparison to ordinary silicon transistor3, [the HEMT] enables electrons to move
_ 10 times faster in normal temperatures, 50 times in terms of theoretical value when
cooled. The principle behind [the HEMT] was originally discovered by the Bell
- Laboratory of the United States. What Fujitsu did was to deve~.op its application
which was believed impossible. Additionally, the technology for magnetic bubble
memory system was also one of the pioneering efforts of Fujitsu. There will be
others--the application of Josephson element circuit and fifth generation computers.
With government subsidies and through j oint development of technologies, Fujitsu will
continue to be a pioneer in computer technology. ~
As expected, Fujitsu's investment in R& D is extensive. In fiscal I980, it invested
about 35 billion yen in hardware, equivalent of 6-7 percent of i.ts sales. The per-
centage rises to 12 percent if software is included.
In terms of equipment investment, Fu~itsu allocated 49 billion yen in 1980, of this,
29 billion yen was spent on semiconductor related equipment. High investment continues;
this year, 53 billion yen (27 billion. for semiconductor equipment) will be invested.
For the computer industry which is at the head of all other industries in the so-
called age of computer and where technological renovations are radical and intense,
investments in R& D are the key to the survival of the enterprises. Because of
this, profits are enevitably reduced and more so because of intense price competition
- among domestic and foreign manufacturers. Fujitsu's 1980 sales net profit rate was
3.2 percen~; that of Japan IBM, one of the superior companies in Japan, was 10.7
percent, even higher than Fujitsu's 7.8 percent sales profit rate. The differences
will not be br~dged for some time. But in fiscal 1979, Fujitsu's computer depart-
ment sales surpassed that of Japan IMB. In 1980, it grew by 17 percent, compared to
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4 percent growth rate for the latter. The difference in scale, in other words, is
growing in favor of Fujitsu, an~ there is no indication that a reversal of this
trend will occur in the future
Having surpassed Japan IBM in cerms o: ...:y Fu~itsu's next target is the overseas
market. The basic strategy for this is ~o e;igulf IBM by "starting from markets
other than the United States and then beaieging it." The battlefronts will include
Australia and Brazil.
Fujitsu's base of operation in the United States, the largest market, is Amdahl
Corporation. Fujitsu has invested 24 percent of the capital oF this company ~ahich,
with further help from the same, has survived and shown signs of recovery since
last year while other plucon manufacturers have succumbed. Fu3itsu is responsible
for joint development and manufacture of large-scale computers, Amdahl for final
assembly and sale. Already the company has received orders for 300 units.
For manufacture of inedium and smaller units and terminals, there is the TFC, a joint
company formed with TRW. The latter has 200 maintenance offices nationally; it is
a large conglomerate. Since last year, TFC has been marketing POS terminals, fin-
ance terminals, small V Series; it plans to introduce units smaller than the medium
M-160.
America is too large to set up independent sales and maintenance networks. Fujitsu's
strategy is to take advantage of the networks of TRW and penetrate the market bit
by bit. The joint venture with TRW signifies the beginning of Fujitsu's serious
attempt to enter the American market.
As for Europe, Fuiitsu has exported a large-scale M-200 to Siemens and is selling
_ OEM in all of the EC countries except Spain. In certain cases, it has beat IBM
- in obtaining orders.
Fuji Electric, Fujitsu's parent compnay, was born of a joint venture between Siemens
and The Furukawa Electric Co Ltd. Fujitsu was also established when Siemens offered
assistance in communication technology. Since then, the roles have been reversed.
Siemens, however, has been long involved with computers and has a good track record
in manufacture of IMB compatibles. Its joint venture with Fujitsu is aiming at
expansion of its product line.
Excluding Great Britain, Europe is also IBM's fiefdom. Although the governments
of Eurapean countries are trying to develop their own manufacturers, IBM's presence
has brought their efforts to minimu~. As such, it could be said that the Siemens-
Fujitsu venture represents a combined attack on IBM by Japanese and European forces.
Recently, reports of a move toward ~oint venture between Fujitus and ICL were pub-
licized. ICL is a powerful European computer manufacturer established with govern-
meiit subsidy during the period when the Labor Party was in power in E?~gland; it has
a rather extensive track record. It succeeded, for the first time in the world, in
reducing IBM's share in England to below 50 percent. Recently, however, it is
- slumping and is on the verge of laying off its employees.
It seemed that during the Minister of MITI Rikusuke Tanaka's visit to England there
was a talk of joint rescue of ICL, but Fu3itsu, it is said, was never informed of it.
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- ICL does not deal in IBM compatibles and therefore Fujitsu cannot offer any
technological assistance; ~~reover, Fu~itsu's EC sales are handled through its agent,
Siemens. The talk, therefore, lacked any possibility of realization. One theory
has it that ICL, as an effective means of obtaining assistance from the British govern-
~ ment, fabricated the "G.B.-Japan Federation" and cited, the fastest-rising Fujitsu
among all other companies as its partner.
This theory cannot be substantiated; it is an incident which illustrates the worldwide
- recognition of the name "Fujitsu," so much so that it was used without the knowledge
uf Fujitsu.
Ceaseless Pursuit of TBM
Recently, simul.taneously with the promotion of president Yamamoto, an extensive
company restructuring was conducted. Both the communications and electronics in-
dustry divisions were abolished, and combining their sales departments, a new sales
promotion division was established. The purpose of this reorganization is to stress
the development of communication equipment and systematization of computers, and, at
the same time, increase their sales. The intensity behind this move may be expressed
as follows: "Nippon Electric's 'C & C' is outdated; Fujitsu's is 'C to the second
power'."
Further changes include the establishment of a separate company, Fujitsu Office
Equipment, from the old OA Equipment Sales Promotion Division. This initiates a more
mobile sales of OA equipment. The OA (office automation) is the most promising item
in the eighties. Yamamoto has pledged "to strengthen the development of OA," and
cited it as one. of the areas which Fujitsu must emphasize in the future.
"The key (according to Kasaburo Nakanishi, f.ormer director of OA Sales Divjsion) to
the future of OA is how WP (word processor)_ is handled." Fujitsu's contr9.bution is
the OASYS .100, based on the kana ~Japanese scriptJ-Chinese character conversion
method. A full-scale shipment of this processor began last October; its demand is
exc~ellent, averaging about 200 units a month. -
The demand for Personal Computer FM-8, introduced in May, is also good, based on
the Fact that it sells for 30-40 percent less t~an the previous model and is equipped
with the most advanced technologies such as the 64 K memory. Monthly production is
expF~ted to be 2,000-3,000 units. Fu~itsu's OA equipment line is comprehensive;
there are, in addition, office computers and facsimiles.
Fujitsu started with communications equipment. Its advances in OA equipment and
optical communication Gystems, fully incorporating the most advanced electronics
technology and its experience in .:~mmunications, are highly eva3.uated. Its merchan-
dise is not limited to computers.
If former president Kanjiro Okada, who pushed for domestic production of computers ~
twenty years ago, can be called the second founder of Fu~itsu, then thQ July reorgan-
ization instituted by Yamamoto can be seen as the beginning of a new era in which
Fujitsu of the eighties will confront the world's super-giant IBM.
The road that Fujitsu had followed as a specialist in computer manufacture was
indeed like the expressway where there is no turning back. Its vitali~, as an
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i~c~N uh~h~ic�ia~. usH: oN~.v
_ enterprise was supported by a sense of urgency as a specialist in computer manufac-
ture and its fate as the protector of the "Rising Sun" computers.
Kawatani's confidence is growing: "IBM is making a series of mistakes and incon-
veniencing the users. Our job is to crumble the IBM myth. We already have enough
strength to endure the race."
= Fujitsu will probably maintain this strength in the future. It is also aware that
without this persistent strength it cannot confront IBM. Yamamoto speaks of [sales]
"of one trillion yen in several years, two trillion in less than ten." Even if it
_ gets to this scale, Fujitsu's technological development strength, with its flexibility
will not deteriorate.
Fujitsu's computer sales is seventh in the world. It is certain that it will jump
to the second place as early as 5 years from now. IBM is unstable; there are even
talks of division. Only Fujitsu is steadfast in its attack on the world monopolized
market. Its continuous challenge [of Fujitsu] is nothing other than a manifestation
of its sense of vitality.
COPYRIGHT: Shukan Oru Toshi 1981
9710
CSO: 4105/262
19
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N'(1R l)F'N'1('!AL l!tik: UNL.Y
SCIENCE AND TECHNOLOGY
DISCUSSION HELD ON IC CONFLICT WITH UNITED STATES
Tokyo SHUKAN TOYO KEIZAI in Japanese 19 Sep 81 pp 32-37
[Article: "Discussion on the U.S.-Japan Conflict, the Approaching VLSI Age"~
[Roundtable discussion by Atsuyashi Ouchi, vice president, NEC; Tadashi Sasak;
Executive Director Sharp; Yuko Shi.mura, director, Society for Industrial
Investigation]
[Text] Japan Leads in Memory
Moderator: It is said that Japan has surpassed the United States in one seg-
ment of the semiconductor industry, but there is a strong impression that the
United States is far ahead in the matter of overall developmental strength.
I would like to analyze the U.S.-Japan confrontation situation in the area of
semiconductors focused on VLSI, and I would like to discuss, first of all,
just where the Japanese semiconductor industry stands today.
Shimura: If we compare the market scale of semiconductors and production
s*_rength, the United States accounts for 50 percent of the world's market
while the remainder is divided between Japan and Europe. There is an even
greater difference in production strength, where the United States has about a
65-percent share of the world's capacity, Japan about 25 percent, and Europe
slightly less than 10 percent. Assuming that the United States is the grand
champion, Japan has the role of a lesser group member at best, and Europe stands
in the ~?idst of the leading apprentices.
Japan is also putting its strength into leading technology areas. For example,
up to about last year the 16 K(16,000 bit) random access memory (RAM, reading
and writl.ng memory) was the big market target that all the makers were aiming
at, and Japan was able to garner a 40-percent share of the market from the
United States, thereby invoking claims from the American side that large volume
exports were disrupting the market.
There is a possibility that the performance with the 16 K will continue with
the 64 K element, which is th~~ entry product to the VLSI market, and this could
well become a seed for friction l~etween these countries.
Moderator: The basic technological development is supposed to have been com-
pleted in thP case of the 64 K, and there is some feeling that Japan may be
ahead of some of the rer~,aining areas such as mass production or in minor im-
provement type technological area problems.
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Ouct~i: This is not something that can be dealt with in a simple manner. IC is
- influenced by scale merit and learning curve (mastery curve). It is expected
from here on that the various Japanese and American companies will start in on
_ 64 K production, and this learning curve will come into play, and now is a
time when all of these companies are putting forth all efforts to start.
Certainly, Japan was stronger in the area of 16 K memory. This is because Japan
had the superior technology to produce a high-quality product cheaply and in
great volume. The Americans are superior where basic development is concerned,
and they produce far more papers and patents. Since superiority is determined
on the basis of a mixture of this basic development strength and mass production
technology, it is not a simple thing to say: "we will also win out on the 64 K."
In addition, Japan has become considerably stronger in the area of IC production
facilities due to the research efforts of the LSI Technology Research Associa-
_ tion, but the United States still has greater strength in areas such as diffu-
sion process facilities, and we cannot rest easy.
Sasaki: Putting everything together, the question of whether Japan can really
put forth its real strength will be determi.ned by the 64 K situation. From the
viewpoint of the Japanese user, even though a similar product is involved, the
service strengths are completely different. They choose the Japanese product
of better quality and service strength. The appearance of 64 K will bring with
it application in many items, and we need to make preparations for that time.
Moderator: The production systems of the Japanese makers for the 64 K are in
the process of some astonishing expansions....
Ouchi: Some very large figures are being tossed about, and if we add them up,
the supply will be several times the world's demand. (laughter) Ithink all we
can say here is that every company has a strong desire to increase its produc-
tion. When Japan managed to capture 40 percent of the 16 K memory market, one
factor was that American production had not com~ into full-scale operation, and
it is risky to say unconditionally that Japan has the strength to take over half
of the world's market.
Shimura: Aren't you, Mr Ouchi, being modest in your statements because you are
under full American pressure? (laughter) Japan accounts for 40 perc�;nt of the
world's share of 64 K as of this year, and even the various surveys made in the
United States show that Japan will account for 40 to 50 percent in the f~ature,.
and there are many who make this prediction.
Ouchi: I was not trying to be particularly modest.... Certainly, I think that
Japan is fairly strong where 64 K alone is concerned. The technology for 64 K
is established, and Japan is in a somewhat better pogition in a race where better
yield and quality are concerned.
On the other hand, there are more microprocessors developed in the United States.
If we look at VLSI in a much wider sense, the Americans are stronger. T.hey have
twice the number of research and academic personnel, and they keep getting funds
from NASA and the Pentagon.
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Inferior in Logic Circuit DPvelopment
Moderator: The pattern for RAM is set, and it will decide t~ie fate of the pro-
duction technology. Is this not where Japan is strong?
Ouchi: If the race is to be decided on the premise that pin connections can be
made at a maximum rate of 15 nanosecond speed, then Japan is stronger. This is
bPCause the situation is the same ~s with the automobile industry and the TV
industry where quality of labor and automation are concerned. On the other
hand, IC is not limited to 64 K, and variaus types of inemary may appe~ar. When
logic (logic circuits) is included in an all-round race, the problems become
~lultiplied.
Moderator: The United States also seems to be moving in a direction to improve
production technology.
Ouch~_: LJhere the Pentagon and NASl. are concerned, no matter what poor perform-
ance;~ such as yield are involved, all costs are borne by the country. That is
diffe~.rent from an environment sucY. as ours where we are in free competition and
_ have to devise means from the outset to avoid wasteful use of materials and so
fort~~. But i.t is extremely dangerous to say that this is the reason the Ameri-
can~, have no capability of producing IC of good quality.
Shimura: Where memory is concc~rned, Japan has c~m^ so far with the 64 K, and
Nippon Electric, Toshiba Information System, and ..�e Communications Laboratory
of Nippon Tel and Tel are pushinb re.search on the 256 K. Now, the United States
- is not up to Japan. That is to say, once Japan has a clearly defined target, it
- is very good at arriving at its goal.
In another direction, unlike memory, random logic or microprocessors require sys-
- tem development capa~ility and creativity. This is an ar~a where the United
States already has ap,~eared with minibit microprocessors ar the ISSCC in February,
where both Hewlett Pack~rd and Intel displayed their ~roducts, and there was none
from Japan. Japan is sti'1 way behind in the matter of searching the virgin
wilderness for ideas.
Development Somewhat Different Froffi Military-Oriented United States
- Moderator: American IC makers are fighting the quality control problem by build-
- ing their own plants in Japan. It is said that the TI plant in Japan is running
very smoothly at the presetit time, and they seem to be aiming at VSLI mass
production.
~ Shimura: Japan TI has threQ plants, while Japan IBM has built a plant at Yashu
(Stiiga Prefecture) where it is targeting IC production in 1983. There is also
talk that Fairchild, Motorola, and Analog Devices are considering locating in
Japan. Behind this is the high quality of Japanese labor, in addition to which
- tt~ey seem to think that Japane.,e technology can be utilized. The world is pay-
ing close attention to the results put out by the FLSI Research Association.
[dhat bothers me is the time to make this move, and when one considers ma~s pro-
duction of 16 K or 64 K class memory, 1983 or later may be somewhat late.
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Moderator: On the other hand, the Japanese makers are pushing production sites
in the United States and Europe. Won't there be problems such as maintaining
product quality and yield?
User Service Will Be Deciding Issue
Ouchi: Where our company is concerned, we purchased one of the Silicon Valley
companies, and we also hope to build a plant 3.n Sacramento. We have a plant in
Ireland and are now constructing one in Scotland. Since automation has progressed
so well, we have no worry about quality. The yield is still somewhat lower than
in Japan, but improvement is possible. Both plants are showing profits.
One of the ma~or points in locating plants in the Western world is to get away
from trade friction, but there is an even greater objective. Just as with cus-
tom IC, service is an important adjunct of IC, and if we have the plant within
the customer's country, the technologists can hear the requests of the customers
or be able to go instantly on the day they are notified by telephone that trou-
- ble has occurred, and such capabilities are a must. If we are to compete in the
world market, there is no escaping the fact that ~~e must put up plants in the
Western world.
Moderator: Mr Sasaki said before that Japan provides better service, but where
the American users are concerned, service for Japanese IC is not necessarily .the
best.
Ouchi: The problem of distance is a little steep.
_ Sasaki: The problem of service, which means a quick response on the part of the
maker, is even more important in the case of gate array (half-finished IC which
is completed according to the wishes of the user).
Ouchi: The installment of distribution lines in accordance with the customer's
orders is what gate array involves, but the present one-touch~m3.cron is also one
in which we listen to the customer's wishes for the ROM section (read out memory).
Moderator: Such being the case, mutual entry on the part of the Japanese and
American makers will become vital.
Sasaki: It is management which has to turn the key for mutual entry. No matter
what kinds of agreements are bandied about, there is the Japanese type manage-
ment, which believes that the customer must not be put to any inconvenience, and
a management which follows the terms of an agreement strictly to the letter,
and there is a wide gulf in between.
Moderator: IC at its foremost technology is deeply involved with military use.
Because there are so few military projects in Japan, does this not constitute an
obstacle?
- Ouchi: This is certainly a ma~or handicap, but there is a tendency for some
advantage taking in the United States. We work to the utmost to keep going.
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Tl~is situation may l~e tough from the monetary standpoint, but it is a plus
spiritual factor. To be sure, the Nippon Tel and Tel Public Corporation takes
overthe role of the military in Japan.
Shimura: The United States at present is working on the VHSIC (very hi;gh speed
IC) on orders from the Pentagon, and this is a major project which is expected
to cost 300 million dollars between 1980 and 1986. This project involves the
development of a super high speed signal processor to be loaded on a radar
- guided type missile. This will require a pattern on the order of 0.5 micron
and the introduction of 250,000 gates per chip to enable speed of severan tens.
of millions to several hundreds of millions of computations per second. There
is no such need in Japan. This is a turn in the direction of reinforcing the
American semiconductor industry.
Survive Because of Being "Poor"
Sasaki: Now, on the basis of our contacts on desk calcuator-use IC with the
American makers, the line of thinking of a designer with respect to a desk cal-
culator is completely different from that of a maker who has been nurtured by
the military. This is something heroic. Because they had been nurtured so far,
tlley finally began to understand what was needed in the line of military calcu-
lators, and they were able to come out with such units. this is why I consider
that it was the military calculator which developed LSI.
If one had the time, ample funds, and good material to work with, a number of
ideas would come forth, but when one attempts to manufacture practical goods out
_ of it, he cannot because he has been too pampered. This is why I believe that
we poor people have been able to achieve what we have through our hard efforts.
The Americans come out with some very fine ideas on microprocessors, but if the
_ Japanese can come up with good software, the poor man Japan will be even stronger
on hardware.
Moderator: The Japanese IC industry up to now has been led by desk calculators,
but what will lead the high density memory and logic of the future? What are the
prospects for its use in the private market?
Sasaki: Whether it is a wealthy man or a maker of large computers, h~ values
reliability so greatly that cost cannot help but be high. When we perform the
functions, we probably will discard anything which involves considerable risk.
Although there can be some failures, we will try to the utmost. As long as there
is the feeling that any item for private use has to be low in cost, there will be
differences between the Americans and Japanese regarding LSI.
rioderator: Ordinary commercial use does not require too great speed. On the
other hand, the most recent Kanji treatment seems to require a large capacity
- and extremely fast CPU (central computing and treating facility) and a.memory
- device.
Ouctii: High-speed elements are becoming necessary even in word processors for
private use, and it has become difficult to differentiate from industrial-use
computers in the matter of machine performance of the private-use units.
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Shimura: Research and development of V::LI in Japan include Nippon Tel and Tel's
pro~ect in the communications area and the Ministry of International Trade and
Industry's next-generation computer pro~ect, and household electrical makers are
not participating in either program. This does not mean that there is no tie~in
with VSLI.
One point I want to make is that VLSI looks toward not only high capacity and
high speed but high density as well. That is to say, a single wafer can pro-
vide the equivalent of three or four times the number of chips, and this makes
- possible improvement in the P.conomics. One other item is the trend to digitali-
zation even in the private-use area, and as the frequency of use of digital cir-
cuits increases, the significance of VLSI is becoming increasingly more important.
Sasaki: The VLSI we handle is considerably different from that used by the com-
puter makers. We consider cost, first of all, as we try to reduce the size of
the chip while we strive for a higher degree 4f integration. It has been adequate
thus far, but treatment of Kan~i characters is slow, and the belief arises that
there will bz some congestion emerging within a few years.
The price of the American VHSIC is too high. What to do? Eventually a non-Newman
approach using parallel treatment and development of suitable software should
provide a pathway to the solution of this problem. It is with this intent that
we are trying to develop a Japanese VLSI for which we are presently drawing up
_ the design, and we expect that some extremely interesting software will become
available to the consumers.
Ouchi: When we talk about VLSI, the first things that come to mind are that this
is an item of super high degree of integration and that a single chip incorporates
100,000 to 1 billion bits, and this definition seems to stand foremost in our
minds. On the other hand, I emphasize to my staff that "VLSI represents a super
precise and fine pattern technology, the first ob~ective of this technology is to
reduce cost, and other considerations include very high reliability and faster
speed."
High-Speed and High-Capacity IC for Kanji Treatment
Moderator: It seems that other than silicon, attention is being directed to
gallium arsenide as possible material for study.
Ouchi: It is a fact that gallium arsenide and the Josephson element will beco~e
important items in the next generation. On the other hand, these units place
great emphasis on speed, so they probably will make up one sector of.a wide
array of IC. It would be a big mistake to assume the end of the age of silicon
is in sight.
Shimuxa: Although silicon may be somewhat limited in its market potential with
the appearance of the gallium arsenide type compound semiconductor, gallium
arsenide is a semiconductor after all, and the semiconductor age will continue.
Ouchi: No matter what is said, there is no need to use gallium arsenide in large
~ volume items such as desk calculators and watches.
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Sasaki: Several years ago, about the time IC was announced, the parts makers
said, "our business will disappear" thereby voicing their concern, but the parts
industry still remains. The same situation also applies here.
Moderator: I see where the VLSI for private use not only will have the capa-
bility of handling Japanese characters but graphics as well.
~
Sasaki: Graphic capability will be incorporated as well as voice and sound
synthesis capability; this unit will be very versatile.
Shimura: I apologize for saying this in front of Mr Sasaki, but the language and
number of phrases entered into an electronic translation machine are very limited.
Even including voice and sound synthesis, the use of several ROM of several mega
(million) bit capacity will be able to provide the capability. This is why VLSI
memory has such important significance.
Ouchi: Kanji treatment is an important area for exploiting the speed and large
capacity memory of VLSI. The IC presently in use is adequate for use in watches,
but should the cost of VLSI come way down, there are sufficient grounds to use
it in watches. In this manner, VLSI probably will infiltrate all semiconductor
areas.
Sasaki: Not only semiconductors but VLSI technology must be applied, because
the potential is unlimited. There are any number of applications, including
printed circuits, distribution line technology, or finishing technology.
What ~Jill Be the Direction of Japanese-American Semiconductor Friction
Sasaki: Among the problems facing the industry is the gradually increasing cost
of investment in facilities. The ratio of investment in facilities with resFect
to sales total is increasing. This is a truly vexing problem.
Ouchi: A few years ago it was necessary to invest 100 million yen in facilities
in order to increase annual sales by 200 million yen, while today 140 million
yen investment is required to achieve the same sales volume, and it is said that
it won't be long until 200 million yen investment will be required to realize
the same return.
Moderator: In other words, you are saying that there is no way but an oligopolis-
tic approach.
Ouchi: This is why it is difficult to invest in business ventures on the West
Coast of the United States. There are also the cries that "Japanese IC makers
have added to the situation" with regard to the irritation to construction
depression. '
Shimura: Wtiile this is the situation with the medium and small makers in
- Silicon Val].ey, large makers such as IBM and TI are making investments such
that certainly we in Japan cannot ignore such moves.
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~ . ,
Moderator: Finally, let us diacuss the direction Japanese-American relations
will take. Just what will be the future problems of the research and develop-
ment system of Japanese private industry or what directions will the SIA (Amer-
ican Semiconductor Industry Association) take in the future, and will the trade
friction be rekindled....
Sasaki: Is it not the case that there is no longer frict3on? Why, even the
import duties have been lowered.
Ouchi: The Americans have from the start kept proposing their own selfish views.
Although Japan lowered duties on IC to bring them to the same level as the Amer-
ians, duties are higher on all other areas where export to the United States is
concerned.
While the VLSI Technology Research Association calls it impertinent, it itself
is receiving funds from the Department of Defense (Boeisho). In the final analy-
sis, it is saying to Washington, "lend us money ~ust as Japan does."
� Sasaki: It will become more and more difficult to voice complaints against
Japan, and they will gradually direct their complaints to their own government.
- Ouchi: If on top of all this there is an advance in mutual extension, the sig-
nificance of export figures will be lost.
Shimura: On the other hand, it cannot be said that the customs problem may not
reappear. Looking at the Jones report of last fall or the statement of Brock
representing USTR to Congress or still further to the statement of the assistant
secretary of commerce, they all indicate that after the automobile the sub~ect
will be the semiconductor and computer, and information equipment is expected
to be the focal puint of Japanese-American trade problems in the eighties. In
any event, the sparks are there as before, and any opening wedge such as mass
export of 64 K has great potential of rekindling the problem.
Ouchi: This is what the Combined Defense Authority (Kokubo Sosho) is saying.
IC is important from a military standpoint, and it is only because the United
States has technology which is absolutely superior that the present ordered
situation is maintained where the West is concerned, and should Japan or Europe
approach this level, military problems will arise. If these words were actually
said, surely a conflict is in the offing.
Shimura: Just as the free ride on defense thesis, there are a number of tech-
nology free ride theses in the history of semiconductors. To be sure, Japan has
_ promptly paid for the technology it introduced, but that is ignored in their
statements. As Japan becomes stronger, this technology free ride thesis will
appear more and more.
COPYRIGHT: Shukan Toyo Keizai 1981
2267
CSO: 4106/3
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1~()R ()I~F'I('1:11, litil~: ()NI.Y
SCIENCE AND TECHNQLOGY
U.S DEMAND ON REMOVING TARIFFS CONSIDERED UNREASONABLE
Tokyo JAPAN ECONOMIC ,10URNAL in English Vol 19 No 982, 24 Nov 81 p 9
[T~xt ] 'fhe computer in- Japan-U.S. ComputerTrade
dustry strongly (InmillfonsWyenl
critirized last weck ~'"~r
Exports to U.S. ImpOrfs from U.S. excess
thc latest U.S. dc~ iv~a . i~.oev eo,se~ e~.~~e
mand that Japan ~v� ~z,eoi c-zs.n v~,~svc+u.e> >v,ese
eliminate tariffs on 197e s.,659(t92.6) ~e.eisi-n.i~ si,9sa
' 29 items, including iveo ~:;~zi i+z9.oi isi,889 .9) i~i;qei
cornputcr main-
frames and peripher- "ofe: rofai of computer mainframe and
peripheral equipment. Yearly percentage
~3~ E'quipment, ~OP change in pareniheses.
COPfC[:~lll~ ~}le SWQII- Source~ Finance Minislry.
in~; trade imbalance ImportTariifSonComputers
in favor of .IaP8t1. (Percent)
~ tiee related story on Apr. Jan. Apr. 1986
~:1~;~ 1.) 197) 1979 1980 1981 (Plannetll
'fsikuma Y31718- Maimrame . 17.5 10.5 9.8 9.1 4.9
Ill(110, resident p( Peripherals 42.5 17.5 16.1 11.6 6.0
p Parts and
~ F'u.jitsu I.td., said accessorles..... 15.0 is.o iss is.s ~.9
that the demand on
thc~ ~rounds of trade imbalance AT&Tcontractfora fiber-optics
~ w�;~s totally unrrasorable as the communications system.
- l~il:il~~r~l computer trade has Executives of leading Japa-
b~~~,n against Japan. nese computer builders hope
:lrcording to the customs that the Japanese Government
cl~~arance st~itistics of the will stiek to the 1979 agreement
Finance 1~Iinislry, Japan's ex- oi the Tokyo Round of multi-
_ purls of computer mainframes lateral trade negotiations which
anci peripherals to the U.S. last calls for a gradual reduction of
year reached a value of ~f 34,927 tariffs on maniframes and
million, merely one-tifth of such~ peripherats down to4.9 per cent
imports from the U.S. and 6 per cent, respectively, by
Inrlu~trymen believe that the 1987.
U.S, now is trying to redress its Incontrast, importers of com-
m;~ssive trade imbalance by puterswelcomedtheU.S. move.
promotinK exports of competi- But a tra.der said that it was 10
tive producf.s, such as com- years too late as Japanese
puters and related goods. makers already h3ve become
H~~wevcr, the Japanese com- strong enough tn compete
puter industry is sorely perplex- against their American rivals
eci with the American "political particularly in the fields of
pressure" following on the heels minicomputers and desktop
o( Fujitsu's failure to win an computers. �
COPYRIG(iT; 1981, tt~e Nilion Keizai Shimbun, Inc.
CSO: 4120/73
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SCIENCE AND TECHNOLOGY
STEEL INDUSTRY SEL'S FINANCIAL CRISIS DANGER IN 1990
Tokyo JAPAN ECONOMIC JOURNAL in English Vol 19 No 982, 24 Nov 81 p 6
[Text ] A pessimistic view has arisen steelmakers into financial
in steel industry circles here straits a nd weaken their inter-
tii:~t their industry, now national competitiveness.
boasting of the world's
~ strun~est cumpetiliveness, will ~aPanese steelmakers thtis
face financial crisis around have come to feel the need to
199o as it will need a tremen- map out long-term equipment
- dous amount of money to ~nvestment plans with their
repl:ice the increasing number e9~Pment situation 10 years
of superannuated production hence taken into account while
facilities. their investment burdens are
Steel industry analysts still relatively light.
estimate that the ratio of rela- American and European
ti~~~~l}� new production facili- steelmakers are said to have
ties ~ in operations for less than lost their international com-
1l1 years i will decli,re to 35.6 per petitiveness from delay in
ce~~~t in 1.WU from the present 60 replacing their production
pcr cent. facilities. The number of
'1'fiis ?neans that Japan's steel operating years for Japanese
~ndustry will have to make a steelmaking facilities averaged
large-scale replacement invest- 9.5 years at the end of fiscal
ment in the latter part of the 1980, compazed to America's
19ri0s in order to maintain its 17.5 per cent early in 1979.
present internatinnal com-
petitireness. It is generally Some observers here,
known that a steelmaking however, suspect that in the
facility must be 60 per cent ~ck of the steel industry's
repl~iced after it has operated latest "crisis outlook" actually
for more than 25 years. ~s the industry's wishes to per-
The induslry's average an- S~de steel users to accept its
nual plant and equipment in- Planned product price hikes
vestment is estimated to swell next year by emphasizing the
to about ~f 1,34o billion in the ~e~ for huge equipment in-
latter part of the 1980s and ~estment in the future.
further lo ~f 1,680 billion in the
1~:K?s, with intlation taken into
accouni, rompared to ~860
billion at prc~senl.
Such big investment burder~s
arc exEx~ctrd lo drive Japanese
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t~()R (1N'FI('1:~1. IItiH; ()Nl.l'
SCIENCE AND TECHNOLOGY
SEAMLESS STEEL PIPES EXPORT PRICES RISE
Tokyo JAPaN ECONOMIC JOURNAL in English Vol 19 ~10 982, 24 Nov 81 p 6
[Text ] Export prices for such pipe. ~
seamless steel pipe and In order to tqeet the
tubes are going up sharply, swelling demadd, four
reflecting the continued oil major Japanese steel-
exploration spree, parti- makers - Nippon Steel
cularly in the U.S. Cocp., Nippon Kokan K.K;,
The average price in the Sumitomo Metal industries,
first half (April-September) Ltd. and Kawasaki Steel
of fiscal 1981 rase 23.3 per Corp. - are now ~operating
cent over the second half ~eir seamless pipe miHs at
(October, 1980-March, 1981) capacity.
oi fiscal 1980 ta 51,113 ton. Their combined seainless ~
pipe exports in the first half
As U.S. Steel ~ Corp., the of the current fiscal year
price leader, elevated its amounted �to 1,549,112 tons.
seamless pipe prices by an Exports in the second half
average of more than 10 per are likely to gain slightly
cent last month, the average over the first half;:a~tho~
price will likely be hiked to Kawasaki Steel ' has~ in-
around ;1,30o per ton tor creased its seamless
even popular types of production capacity.
COPYRIGHT: 1981, the Nihon Keizai Shimbun, Inc.
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SCIENCE AND TECHNOLOGY
GENERAL ELECTRIC MACHINERY MAKERS BOOST EXPENDITURE
Tokyo JAPAN ECONOMIC JOURNAL in English Vol 19 No 982, 24 Nov 81 p 9
[ Text ] Four generai electric ma- vestments in VTRs ' Four General Electric Machinery
chinery manufacturers - and color picture Manufaclurers'RevisedCapitalSpending
Hitachi, Ltd., Tashiba Corp., tubes are ,includ- Programs forFisca11981 .
Mitsubishi Electric Corp. and ed, investments for (In billions of yen)
Fuji ~lectric Co. - have been the electronics FY~~e'
aggressively expanding their field account for RO . . Fr~~o .~�i,~an~
v^ 96chq.from
production ~capacities and per cent .of~ Mitsu- ; , IsctueU. planneQ R.~,i..a FY19l0
streamlining production lines bishi's total.capital Hir~a,i n.s w e~ � s.~
by revising upward their ori~i- spending~ . for fhis To~^~~ s~.d s~ +as.o
Mfftulflshl JS.O 41 4S +4l.6
nal fiscal 1881 plant and equip year. , Fuu s... ~o.o , ia u :+~o.o
ment investment plans. The character of .~otai a rn. ~our iu.i ~vi sae ,+~e.i
Their combined capital their investments NEC~ f6.0 n es +w.e
spending in fiscal 1981 is now this year .~s ~18~ ~-~Mludtnq ihose o( aMiliated companies.
estimated to rise 18.1 per cent they hardly are ~
from the preceding term to concerned with buildi~g � 1981 capital spending plan to
~208 billion. Computers, semi- an entirely new plant.. In- ~50 biilion from ~94 billion.
conductors and video tape re~ stead, they are for setting up Originally, the Osaka consumer
- corders are major targets for factories in their exiatip~ � electronics maker had ear-
their capital spending. plants oc for installing mae ao- marked ~~f 40 biUion for this
Among the four, Tashiba phisticated liaes. year.. ~
seems to be the most aggres- Their aggressive investments Fujftsu Ltd. has boosted its
sive. It has revised its initial owe much� to their ~,vrrent fiscal 1981 capital outlay pro-
fiscal 1981 capital spending favorsble business perform- gram by ~10 billion to ~59
program by ~ 10 billion to ~67 ances and bri~t prospects in billion from the original ~49
billion (JEJ-Nov. 3 issue). the lattar half of fiscal ~981. In- billion. The revised Cgure
- ~ Mitsubishi has earmarked ~ 4 tensified price competitioa in represents a 31 per cent gain
billion more funds than the electroidcs products also is from the fiscal 1980 perform-
originally planed ~ 41 billion forcing them to continue spend- ance. Of the amount, ~f33.5~
for such investments in the cur� ing a huge amount of c~pital. billion will be for facilities to
_ rent term. The revised amount Othenvise, they will be elimi- produce semiconductors and
is 10 billion larger than the nated from the competttion. other electronic components.
preceding year's performance. Beaides the four general elec� On the strength of the increased
Hitachi revised the original tric machinery makera, Nippon funds, Fujitsu wlil be able to
figure of ~ 80 billion to ~ 82 bil- Electric Co. ( NEC> ia actlv~ely boost 9ts montHly production
lion. The increased portion is boosting production cap~cities. capacity of 64-kilobit random
relatively small because it put NEC competes with tbe fouz access memory devices to 700,-
the original program at a high firms in the field of senllcon- 000 chips by the end d next
level. ductors and computeca. Plaut March.
Most of the earmarked funds and equipment inV~tments
are for facilitces to praduce planned� by �,~I~C.,;Wd af-
electrorli~s 'products, such as filiated compaete~~ hav~~~bil~fi'~
semiconductors, computers revieed upward by ~fB biUion to
and VTRs. In the case of Mitau- ~f 85 billldn. The ewiaed figure ~
bishi, ~ 23 billion of the ~t 45 bil- is 20 b111ion 1arBes' tbAe~t t6e
lion are for the semicondiic� pceceding ye~ar. . �
tor/computer division. If io- Sharp aiso has raised its tiscal
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NEW MINUTE METAL PARTICLES PRODUCTION DISCOVERED '
Tokyo JAPAN ECONOMIC JOURNAL in English Vol 19 No 982, 24 Nov 81 p 16
[Text ] A method to produce excep- metal and gas. It thus Used for the experiment with
tionally fine particles of still has to explain success were specimens of
_ metals, ranging in diameter clearly the principle of iron, cobalt, titanium, tan-
from 1/10,0(~Uth to 3/100,000th of how such extremely talum, and ~aUoys of iron, in-
a millimeter, at an extremely tine metal particles cluding nickel, and cobalt. The
low cosl, has been developed by are created by the resultant particles were not
the National ftesearch Institute method. But it has uniform in size and connected
for Mekals of the Science and presumed that its use like strings ~ beads because it
Technology Agency. ot a hydrogen gas with Was still an experimental trial.
According to the institute, the an electric arc dis- But they were obtained at the
method, featuring utilization of charge results in in- rate of 1 gram to 0.2 grams per
electric arc discharges, though ducing the gas into ?ninute at an electrie povVer
still experimental, is without metal specimens and consumption of only 6 kilo-
precedent anywhere for its forcing very tiny Watts.
efficacy in creating such ultra- metal particles out when the ~'~ction of such ultra-fine
- fine particles ot various metals. gas emerges. metal particles is still at the
Moreover, it is fit for mass- , The method consists in ~'eshold of the development of
production of such particles for placing a metal sample in a~ ~e technology concerned any-
its surprisingly low cost, mixture of argon and hydra Where in the world. In Japan,
possihly only about 1 per cent gen in an electric arc dis- ~e Science and Technology
of the best conventional method charge chamber any collecGng Ag~cy had started developing
ot making such metal particles. very fine particles of Phe metal such technology only last April.
The institute said the method coming out of the specimen,
was accidentally discovered as when the specimen is hit by the
a by-prnduct of i~s research on are discharge. The mixed gas
re~ctions between molten was not pressurized.
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SCIENCE AND TECHNOLOGY
- SHARP TO PRODUCE VISIBLE LIGHT SEMICONDUCTOR LASER
Tokyo JAPAN ECONOMIC JOURNAL in English Vol 19 No 982, 24 Nov 81 p 16
[Text ] Sharp Corp. has announced The corporation had earlier
developing a high-output visible developed a similar semicon-
light-generating semiconductor ductor laser of 5 milliwatts or
laser hitherto considered diffi- half in output for application to
cult to produce in an applicable making a digital audio .
form. recording-reproducing disc.
The Osaka electric-electronic The corporation has followed
equipment producer plans to it up with the development of a,
start mass production of the better version by such new
new laser in February, next method as to thin out the active
year. It stands greatly to speed layer without the danger af
up recording and reproduction destruction of its erystallization
of the opto-magnetic audio even by doubling the output, to
discs and the laser printers reform the structure� of the
now under development in ~ooved layer to stabilize the
Jap~n. beam oscillations, and to mini-
- Sharp's new product is a mize the occurrence of the
gallium-aluminum-arsenide Watt-less lreactive> current.
semiconductor laser having an The new semiconductor,
optical output of 10 milliwatts rneasuring 0.25 millimeters
and emitting a visible red light high, 0.3 wide and 0.12 deep,
of 0.78 microns in wavelength. starts high temperature oscil-
It features an improved ver- lations when an electric current
sion of the company's own. of 40 milliamperes or up, that
semiconductor laser structure ~s, the threshold (stim.ulus-
known as the VSIS (V-Chac~ ~ving) value or higher is
nelled Substrate Inner Stripe) applied, and then put into
type. The special structure is ~~~nt activity by sending an
characterized by a grooved operating current of 70
layer of V-shape in cross-sec- milliamperes into it.
tion beneath the laser beam To go along with the new
shooting active layer first to laser, the corporation also
- pen up the ascillated beam in developed a new optomagnetic
the groove so that a light nearly audio diac-making film of ter-
circular in cross-section will be bium-diprosium-iron-family
emitted. amorphous aubstance type.
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i~OR 111~1~111A1 I~til~' IINI.1'
SCIENCE AND TECHNOLOCY
.
REAGENT MADE FOR MEASURING MOLECULAR WEIGHTS
Tukyo JAPAN ECONOMII: JOURNAL in English Vol 19 No 982, 24 Nov 81 p 16
[Text ] A reagent to precisely University af Tokyo Faculty d
measure the molecular weights Science expected the new
oF all surts of substances be- product to be an innovational
tween 5,000 and 800,000 has reagent in biochemical or
been commercially developed biotechnical studies because
by Hayashibara Biochemical there has so far been no good
Laboratories, inc. (Hayashi- reagent capable o~ accurately
bara Co. ) of Okayama, and will measuririg proteins or nucleic
soon be exclusively marketed acids of 500,000 or larger in
by Showa Denko K.K. of Takyo. molecular weight.
Accnrding to sources clase to Hayashibara will shortly
the Okayama manufacturer, start mass-producing the new
the new product is a redevel- r~~nt at its Okayama factory
o d version of its "edible" and supplying the entire output
~ to Showa Denko. Showa Dedco
plastic, a sort of polysac- W~ chasea aut of cnimerous
rharoid, named "Pullulan", sales applicants, both domestic
developed back in 1973. and foreign, because, besides
Hitherto used as molecular being Japan's top-level
~S�~~i~ht-measuring reagents chemical and fertilizer maker,
arc various brands, including it has a long record af research,
~~l)extlan," a Swedish-produced development, information
polysaccharoid. But they have gathering and sales. To be
im~ariabiy been imprecise or marketed under Showa Denko's
limited in applicability. own tradename of "Shodex
[iecause of its great range of ap~ STANDARD P-82," the new
plicability, it is expected to be reagent will be an expengive
usable even in high-speed in- commodity priced at more than
dustrial or other sophisticated ~200,000 a gram. Still Showa
chromatographs and high- Denko expects to sell several
pr~~cision biochemical and kilograms annually to research
t~iolechnical research. A institutions throughout the
biochemic~i expert ot the world.
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EY~R ~FFrc~.4t. ~~~F~ crv~.1~
SCIENCE AND TECHNOLOC=Y
POTENTIAL OF DEFENSE INDUSTRY EXAMINED
Tokyo NIKKEI SANGYO SHIMBUN in English 25-30 Sep, 2-3 Oct 81
[25 Sep 81 pn 10-12]
[Text]
Potentiality of Japan's Defense Industry (Par~t 1) Time fcr Its Becoming
- Independent Not Too F'ar in the Future
Our coun~try's defense industry is on the verge of becaming a full-fledged
independent industry. Occasioned by the US request for fihe strengthening of
defense power, voices are also mounting within our coun~ry, centering on the LDP,
for the "accelerating of the consolidation of defense power," and the defense
budget is starting to increase steadily. Expectations for its quantitative
expansion are mounting,on the one hand, while on the other, the development of
our country's own independent defense equipment, through the application of
our country's advanced electronic and communications technology, is also
becoming conspicuous. The US is asking to be supplied with military technology
and for joint development, and there are even appearing argumeats for th~ re-
studying of the Defense Plan General Outline. There is no possibility that
our country's defense industry, which is limited to th~ fields of conventional
weapons and which abidss by the principle of not exporting weapons, based on.
the basic defense policy of adhering strictly to defense, will suddenls* grow.
into a mammoth industry at one stroke, as seen in the US. However, the time
for its becoming independent, as a defense industry suited to the actual
situation in our country, is not too far away. In this series, the possibility
for its grourth, its technological potentialities, its enterprise management,
and its effects on our country's industries, as a whole, will be explored.
One-Trillion-Yen Market Very Near at Hand; Autonomous Developznent,
after Quantitative Expansion; Aiming at Extrication from Licensed
Domestic Production
Orders, Based on Medium-Term Operations Estimate, Being Placed at Fast_Pacs
"There is the standard that defense expenditvres will be within one
percent of the GNP. Therefore, there is no possibility of the defense
industry becoming big, all of a sudden. It may be a different story if
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~ _
it is said that it is alright ~o exceed the one-percent level The
~ statemen-ts by Keidanren's (Federation of Economic Organizations) Defense
- Production Committee Chairman Gakuji MORIYA (Advisor to Mitsubishi Heavy
Industries) are always cautious, unaffected by the generally prevailing
mood for the strengthening of defense power. There is no sense of urgency
in the defense industry circles, desiring even a small increase in the amount
of work. Z'his is because the situation is now appearing that, even without
_ their saying an~thing, orders from the JDA will steadily increase.
Or�ders for main equipment under the Medium-Term Oper~tions Estimate
(the 1978 Medium-Term Operations Estimate for the period from fiscal 1980
to fiscal 1984), which is the JDA's plan for equipment and organization,
_ and the early attainment of which was requested by former US President CARTER,
are now being placed, at a fast pace. If the budget request for fiscal 1982�
- for the F-15's (licensed domestic production by Mitsubishi Heavy Tndustries)
- (~i3 planes) is approved, the target of 77 planes set under the Medium-Term
~perations Estimate will be achieved. The rate of attainment of the Medium-
- T.erm Operations Estimate for all main equipment, such as the P3C anti-submarine
_ patrol planes (licensed domestic production by Kawasaki Heavy Industries) and
the 74-model tanks, will also exceed 70 percent. �
The Ke:.danren's Defense Production Committee, which is the general
- controller of our country's defense industry has been requesting that
"c3pi*.al zxpenditures," which include the expenses for the purchase of equipment,
- suc~ as planes, research and development expenses and facilities consolida-
_ ~ r~e:, expenses, will be increased to account for at least 30 percer,t of the
_ de=ease budget as a whole.
Ho:~recer, if the placing o~ orders for a large number of F-15's and
P3C's under t7e riscal 1982 budget is approved, the expenditures even just
to p~:r ~~:r ~~e equipment :or which orders have been placed before and in fiscal
1~82, will ex~eed one trillion yen in the fiscal 1983 budget, and there is even
- ti:e pos~ibility that thE amount will account for nearly 40 p~rcent of the
defense bud~et. The defense ~ndustry circles view that "our requests_in the
I:~~;;~ w~li ~ome ~b be rcal~zed; even if we do nothing about them" (Chief of
t7e Defenst Production Committee Secretariat Hiroshi yiORI KAWA), and �they are
:~oor on t!:e po~.nt of starting moves to formulate new requests More in keeping
- ;:~th ~r~e rapid development of equipment. This shows how great the cnanges
~ in the environment surrounding the defense industry are. The 3~A is aiming
_ ~ne a~~tainment of the equipment level prascribed i_~~ thE Defense Plan
~aneral Outline, even during the period of the nex~t-term N!edium-Term Operations
?~t:mate (rrom fiscal 1983 to fiscal 1987),;which :.s slated to be foi~mulated,
even as early as next spring, with the early attainn;ent of the 1978 Medium-
'~'�rm Operations Estimate as a foothold. .
Even Possibility of Re-Studying General Outline, in Co~npliance with US Request
HowevPr, the requests for the strengthening of defer.se power, presented
by the US side at the Japan-LS administrative-level cor.sultations on security
in June and elsewhere, largely e:{ceed the level given in the Genera~. Oiitline.
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ror this reason, there are even starting to appear arguments for the re-studying
of tt~e General Outline (revising it in an upward directio;~), in compliance with
the wishes of the US, in the LDP Security Research Council, ete. This stems
fro~n the awareness that the General Outline, which was dzcided in Octobe"r,
1976, no longer provi3es a guideline for the equipment program.
The defense industry circles are already waiting ea~erly, observing
that "i~ the General Outline is revised, the facilities which we now have
will certainly not be suff icient" (Kawasaki Heavy Industries Vice President
Renzo NIHEI). After all, if the interceptor-righter groups, consisting of
such pianes as the F-15, were to b~ increased by four groups (one flight
group is organized with 18 planes), as requested by the US, it will mean
that nearly 100 F-15's, including the reserve planes, which will cost about
11 billion yen per plane, will come to be needed. The expenses for the
- purchase of this number of planes alone will exceed one trillion yen.
The monetary amount of the JDA's contracts in fiscal 1980 is 953.1
_ billion yen (of which 12 percent is for imports, e�tc.) This amount includes
the e:~penses for the purchase of fuel, textile products, etc., and it is not
all for frontline equipment. Even so, the scale of the defense industry
e~:ceeding the big line of one trillion yen is now a matter of time.
However, the main-stream of our country's defense production is
- licensed domestic production, as in the case of the F-15's and the P3C's.
~ven i= ~he salas amcunt increases, there will remain the dissatisfaction
as expressed by President Taiji UBUKATA of Ishikawajima-Harima Heavy In-
dustries, which manufactures the engines for these two types of planes by
licensed production, that "licensed domestic production alone,is a problem."
Their aim is autonomous development, after quantitative expansion. Defense
Production Committee Chairman MORiYA and others are already launching PR
campaigns, saying that "if a preparation period is given us, it will be
- possible to develop frontline fighters, which can succeed to the F-15's."
Different from the case of the aircraft sector; in which the main-stream
is licensad production, domestic production is the core for ground equipment.
There is, for example, the 74-model tank, which the GSDF says with conviction
that "it is one or the highest quality products, even in the world, as a tank
of the 1970's." Even in the midst of the mood for layti.ng emphasis on air and
saa equipment, orders for these tanks have been steadily increasing, from 60
tar.ks in fiscal 1980, to 72 tanks in fiscal 1981 and to 80 tanks in the request
ror riscal 1982. It has reached the point where Special Vehicles Department
~irec~or Irrao HAYASHI, who has been in charge of the designing of tanks since
the rirst half of the 1950's, in Mitsubishi Heavy Industries, can now make
a daclaratior. or independence, saying that "in the past, we were a'family
memb~r, s~:~ported by other sectors' of the firm, but we have now reached the
stage where we can manage on our own, somehow or other."
'?'he :~~xt-term Base Air Defense Ground Environment (BADGE-X), which will
become ti:e keystone for our country's ~ir-defense, will also be manufactured
~-~astic:all~. Influential American firms approached the JDA, but computers
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ar:d com^~~~.ni~ations technology, which are needed for BADGE-X, can be fully
z~ken care ~r: domestically. In regard to the software for the air-defense
system alor.e, Japan ~lectric, Fujitsu and Hitachi Works are aiming at
receiving orders, ~~sing Hu~hes Aircraft, General Dynamics and SDC, respectively,
as their "s.:b-contractors."
Some Missiles Are First-Grade Products
Essentially, the strength of the defense industry reflects the level
of the industrial ability of that country. Some missiles, such as the aix-to-
ship ASM-1 missiles, dcveloped by Mitsubishi Heavy Industries, and Tokyo
Shibaura Electric's short SAM's are rated very highly as top-quality products.
This is because our c~untry's electronics technology can be utilized fully in
the gu.i.dancesystem, etc., of these products. Our country has now reached the
level where the US is asking for the supply of military technology, such as
_ our country's high-precision electronic parts, saying that "it is a problem,
- for the offering of technology to be one-way traffic."
The defense industry is now starting to shcw signs of quantitative
expansion. Even so, howevzr, the ratio of the defense industry to the
industrial circles as a whole is so sma:'.J. as to be almost negligible. The
_ production of defense equipment (including foodstuffs, textiles, etc.),
. accounts for only 0.38 percent (in fiscal 1978) of all the industrial pro-
duction 3mount.
The US Defense Department placed orders to the munitions industry,
amounting tu 76.8 billion dollars in fiscal 1980. The amount is roughly
16 times that of the orders placed by our country's JDA. As the defense
expenditures of Japan and the US in the same fiscal year was also about
the ratio of 1 to 16, this difference is quite natural. Furthermore, in
_ the case of our country, it does not have strategic weapons, such as the
ICBM, and exports of weapons are also virtually banned, under the three
principles concerning weapons exports. Furthertnor~, a ceiling of less
than one percent of the GNP is placed on defense expenditures, at the present
time. Therefore, there is no likelihood of mammoth military enterprises,
as seen in the US, being created. However, it is certain that a defense
industry, which is suited to the actual situation in our country, is coming
to take root steadily.
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~ F'l)It OF'h'It'IAI. t'tiF: UN1.1'
Changes in Ratios of Personnel and Food Expenditures, and Capital Expenditures
to Defense Budget, as a Whole
FY1978 FY1979 FY1980 FY1981 FY1982 (request)
Ratio of personnel
and food expenses 54,4$ 51.4$ ~ 49.3$ 47.7~ 44.8~
Capital expendi- 20.5 22.6 24.4 25.7 ' 26.7
tures (total of
expenses for buy-
ing equipment,
research and
development, and
consolidation of
facilities)
[26 Sep 81 pp 11-13]
[Text ]
~~t.~n~;aiit;~ of Japan's Defense Industry lPart 2) Becomiag Arena fo�r
~.;~~~::t~tio:~ in Technology
Electronic Firms Fired wit'~ Enthusiasm; Japan St~el Tu~e �in
H~t Pursuit in Construction of Escort Ships; Esco:~t Shigs
for 'rlhich There ~dill be Demand for Repair Are Attractive
The Japan Shipbuilding Industry Association's Naval Shi~s C~mmit~tee
is a gatherino of eight companies ~�rhich receive ord2rs from the ~s~A for the
- building and repair of naval ships, ~ncluding escort ships, mine-sweepers
and submarines. Of these eight firms, five firms, namely Mitsubishi Heavy
Industries, Ishikawajima-Harima Heavy Industries, Sumitomo Heavy Machine
Industry, Mitsu~ Shipbuilding and Hitachi Shipbuilding are in charge of
building escort ships, while Mitsubishi Heavy Industries and Kawasaki Heavy
Industries build submarines. Japan Steel Tube, which has so rar been
- excluded from taking part in the production of the two major equipment itensfor
sea defense, among the influential companies, has recently started to show
moves for securing orders for the construction of escort ships and is causing
a flutter among o~ther companies. The five firms are trying to check the
entry of a ne~~, competitor, saying that "even if the orders were to become
twice that at present, we can fully meet the demand with ~the facilities which
we now have."
~ Japan Steel Tube Managing Director and concurrently head of the
Ship Division Tsuneo SEKIKAWA is showing a low posture, saying that "access
(by a new entran~ti is difficult, under the present shipbuilding pace; the
first thing for us is to ~ccumulate the know-how fnr building naval ships,
and we are not thinking of joining them immediately." However, he does not
hide the fact tha~t preparations are already being made for tha't purpose.
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The reason why Japan Steel Tube has decided to enter the field of
detense production, even knowing fully well that it will be met with strong
resistance from other shipbuilding companies, lies in the fact that "the
mar.agement of the various companies building escort ships is in a stable
state" (SEKIKAWA). Different from ships for exports and merchant ships,
:,rhich will directly be affzcted by business fluctuations, escort ships are
vez,y attractive, as the placing of orders for them goes according to the
planned schedule, as the monetary amount oer ship is also big, and also as
it is possible to expect demand for repairs. The ratio of defense orders
~or Japan Steel Tube's Shipbuilding Division is only 2.5 percent, while in
the c:se of t�litsubishi Heavy Industries, which it regards as the target to
emulate, ~the ratio has already exceeded tne 10-percent mark (as of fiscal
19�0, for both cases).
Another factor which has led Japan Steel Tube to seek access into
this sector is that the spread merit of the know-how for the building of
- escort ships to the building of inerchant ships is not small. Mitsubishi
Heav;~ Industries' Naval Ship Division Director Kiyotaka MATSUNO testifies
that "the reducing of vibration and noise is becoming a technological task
in regard to merchant ships, and the parts which are common to both naval
ship and merchant ship technology are big."
~lec:ror.~c-~~a~icn of Equipment Is Being Further Accelerated
- ~lectror.ic equipment is showing a remarka.ble inerease, recently, in
derense de;~and. According to an estimate made ]~y a certain influential
- ele~t~^o~_c instruments manufacturer, electronic equipment, including missiles,
_s con;,:d~red to have accounted for about 200 billion yan, of the total
urrount c` orders piaced by the JDA in the last fiscal year (about 950
b;'_l~c; _;::n) (rive years ago, the amount was 70 billion yen, in the total
xr~oun~ c` ~rders of 450 billion yen). Electronics -Cechnology has made
inroads in~o all fieids of defense, ranging from missiles, aircraft, naval
.;h=:~s, to various types of ground air-defense systems. The next-term P3C
anti-sui~~arine patrol planes will cost about 10 billion yen per plane, but
o~ this ar:ount, more than 40 percent will be accounted for by electronic
- equi~ir,en~ azd instruments to b~ placed on board the plane.
It is cert~in that "this kind of
'eiec=renic-~i~a~~on ot er?L~ame~:' 4i111
be fu:ther ~zccelerated ir. the future" (JDA Technological Research 3r.d Develop-
ment Ins-ti ~ate ~ire ~tor Yukie OMORI The Nomura Over~lJ. : ~searc'.: Institute
has rormulat~d an outlooh for defense-re].ated e~penc:it~res, up to fiscal 1984.
It estim~:ces the anr.ual increase rate of er.penditures for eZuipmen~t a~t 19 per-
cent, bu~ it exgects that the inerease r~�tz, ir liiaited to electronies eauip-
ment alone, will far exceed 20 percent.
All the more for this reason, the posture of 2~ectronic equipment
- manufacturers toward defense production has beco~re v�ry positive, beyor~3 com-
parison witti their attitudes in tt-,e past. Hitachi Works, wnich had s~ rar
been lagging behind t4itsubishi Electric t^.achiner~~, Tokyo Sl:ibaura Electric
and Japa:, Electric, established a defense technology promotion headquar~~ers
in August or last year. Fujitsu is also shifting to a roll-back, newly
!~0
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establisnir_g the Fujitsu System Overall Research Institute in January of
this year.
This is because they view that "the increased degre~ of �the combina'tion
of defense technolo~ry, centering on electronics, orill enaDle the full utiliza-
tion oF technolog~ developed for civilian use" (Hitachi). Fujitsu Vice
President Taichir~ ATARASHI says bluntly and boidly, "It would be absurd if
_ rre were to over'_cok thz defense mnrket, which is about to attain rapid growth.
In two ar t~.ree y~ars, tiae ~,rill increase the amount of arders we receive to
twice the pi~::sent amount, or to 10 billion yen." Hitachi assi~s 60 s~taff
members to :he Defense Technology Promotion Headquarters on a standing basis,
while Fujitsu has 130 staff inembers in its Research Institute, and �lhey are
both showing very strong enthusiasm.
Partly a Pl.sce for Studying and Acquiring Know-How
It is not only because they toolc note of the growth potent_al that
these two ccmpanies coasolid3ted their structure foi~ defense production an~
for the accep~tance of such orders, roughl~ around the sane time. I~ is not
unconnected with the fact that such large-scale systems as the BADGE system
and Hawk and Nike surface-to-air missiles, which cost from 200 to 300 Aillion
,~en and ev~n as much as one trillion yen, are approaching the time for renewal.
"If we miss this chance, a decisive difference will appear with the manufacturers
who entered this field earlier" (Hitachi). It ~aill not only mean the missing
of a busine5s opportunity, but it will also lead to the losing oi a place for
"studies," `or the acquiring of know-how for systems designing, which is incom-
~arably bi;ger in scale and ~rhich requires far greater degress of precision,
than on-line systems, adopted by banks, etc. The defense market from no:a on
is beco~ning an arena where comprehensive electronic manufacturers will com-
pete with oi:e another in theirsystemsconstruction ability and in -th~~ performance
of the ir prc;~uc~s .
This is most symbolically shown in the BADGE-X sales competition.
Such early-comer manufacturers as Mitsubishi Electric Machinery,Toshiba and
Oki Elactric are planning to present a proposal jointly, forming a team.
However, tiitachi and Fujitsu will put their real strength to test, independently,
apart from what the outcome will be.
At t;:e same time, manufacturers other than major companies are also
_ ma~ing frar.tic efforts to strengthen their defense sectors. Holcushin Electric
Mact-:ine Manufacturing Works, which is a manufacturer of aviation instruments
and syste~s, will carr~ o~~t a large-scale facilities investment, in prepara-
tian ror the pr~duction of auxiliary iastruments for the F-15's and the P3C's.
I~t is already mak:.ag preparations for an age of intensified competitior,
s,3vin~; tnat when the weight of electronic equipment increases, "competitio~
in performance, costs and quality will become severer, and this will affect
the share of orders received" (Managing Director Sumio UEHATA). This kind
of respon~~ ~s seen commonly among all electronic equipment manufac�turers,
irres~%ective of their size.
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F'UR UFFICI:~I. t'tiF' t)Ni.l
It is said that defense production, though having a high growth
~oter.tielity, "doe; not bring such big profits as is generally thought."
However, i~ has the merit o~ "broadenin~ the scope of ap~lication of tech-
nology ~~;hich has been refined through the production of goods for c~vilian
us~, at:d enab~ing the acquisytiar. oF know-how and techniques, which cannot
~e lea-rnec: ia civ~lian 1a~and sectors" (T~shiba .President Shoicr,i Sl~3P. and
Jaca:. ~'_~ctric President Tadahiro SEKIMOTO). All the more for this reason,
- various related enterprises are aiming at strengthening their de~'ense sectors,
eve7 if it means "the paying of tuition, for the time being" (Fujitsu Jice
Fresidant ATARASHI). Research and development investments, in a different
rorm this is one aspect of defense production in enterprises.
- 20 Top-Ranking Companies, Based on Amount of Defense Contracts
(For `iscal 1980)
Order Enterprise Name Mone~ary Amount ~
1. Mitsubishi Heavy Industries ~234,540 million
2. Ishikawajima-Harima Heavy Industries 108,470 million
3. Kawasaki Heavy Industries ' 81,190 million
4. Mitsubishi Electric Machinery 72,380 million
5. Tokyo Shibaura Electric 32,900 million
o. Japan Electr,ic 22,310 million
7. Ito-Chu Aviation 14,040 million
8. Japan Petroleum 12,900 million
9. Japan Steel Works 12,270 million
10. Sumitomo Heavy i4achine Industry 12,040 million
11. Komatsu Works 12,020 million
12. Hitachi Shipbuilding 11,410 million
13. Tokyo Instruments 9,390 million
14. Hitachi Works 8,920 million
15. hlaruzen Petroleum 7,930 million
16. Oki Electric Industry 7,750 millior.
17. Shinmeiwa Industry 7,290 millwon
1&. Mitsubishi Shoji Trading Company 6,940 million
19. Daikin Industry 6,760 million
20. Shimazu Works 6,710 million
(For tiscal 1979)
1. Mitsubishi Heavy Industries ~F96,930 million
2. hiitsubishi Electric Machinery 53,960 million
- 3. Kawasaki Heavy Industries 49,550 million
4. Ishikawajima-Harima Heavy Industries 39,900 million
5. Tokyo Shibaura Electric 18,190 million
6. Japan Electric 16,640 million
7. Japan Steel Tube 16,580 million
8. Mitsui Shipbuilding 13,670 million
9. Komatsu Works 10,290 million
10. Japan Petroleum 8,660 million
11. Oki Electric Industry 8,5~0 million
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12. Japan Steel Works 8,150 million
13. Fujitsu 7,660 million
14. Ito-Chu Aviation 7,300 million
15. Sumitomo Heavy Machine Industry 7,150 million
16. Fuji Heavy Industry 6,710 million
17. Shinmeiwa Industry 6,~01 million
18. Hitachi Shipbuilding 6;700 million
19. Fuji Electric Machinery 5,850 million
_ 20. Nissan Motors 5,790 million
[ 28 Sep 81 pp 7--9 )
[Text]
?otentiality of Japan's Defense Industry (Part 3) Potential Ability for
Davelopment of Conventier.al Weanons
~ Production of rlissiles at Loyr Cost; iieading i1 Direction of
Breaking Through the "Wall of Quantity" with Autonomous Equipment
"'~t we are permitted to use 100 billion yen as development funds, we
will autonomously develop the next-term surface-to-air missiles (SAM-Y) to
follow 2dikes and Hawks." This is what a JDA official in charge of develop-
ment says, with confidence.
Research Budget Request of Less than 20 Million Yen ~
The most likely candidate for SAM-X, the purchasing funds for which
will exceed one ~trillion yen, is the Patriot, manufactured by the Raytheon
Corporation of the US. This is a missile on which research and development
have beea continuing for more than ten years. Accordiiig to our country's
industry circles concerned, which are aiming at its�"licensed domestic pi~o-
~uction, the development e;~penditures to be disbursed by the US Goverr.ment
up to the time of the full-scale production of Patriots, slated for the �
autumn of 1982, will arnount to about 400 billiou yen, calculated in terms
of the Japanese yen.
As an alternative plan for this Patriot, Mitsubishi Heavy Industries
and others have presented an autonomous development plan for Nike-Phoenix,
to the Technology Research and Development Insti~l-ute, which is the main JDA
body for defense equipment development. However, the JDA, in its rough-
estimatz budget requests for fiscal 1982, is asking for only a little less
than 20 million yen as the research expenses for the Nike-Phoenix, when it
is requesting 500 million yen as survey costs for the in�troduction of the
Patriot.
T!~erz has been no change in the JDA's basic policy for "deeiding on
the succeeding model, after checking into the performances of both models."
Huwevcr, it does not seem likely that it will decide on the autonomous
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Fc)R OF'F'I('1:11. l'~b' (1N1.1~
development of the Vike-Phoenix. After all, the budget foi~ the Technology
Research and Development Institu~te in fiscal 1981 was only 31.7 billion yen.
E�~~n if the development of SAM-X were to be possible, with research funds of
100 billion yen, it means that it wi11 need development funds, which are more
than three times the total annual budget of the Institute itself. The shortage
o~ a large amount of development funds is posing an obstacle to autonomous
development. However, autonomous developmen~t is achieving results steadily '
in the sector of short-range small-size missiles.
For example, the short SAM, which Tokyo Shibaura Electric jointly
c]eveloped with the Technology Research and Development Institute. I~ had
a difficult start, such as the arising of arguments~concerning its per-
formance,in the Diet, in the autumn of last year, just before the starting
o?' the compilation of the fiscal 1981 budget, which included its f~ t-scale
introduction, on the grounds that it was inferior in performance, compared
caith Roland (jointly developed by France and West Germany), which was the
ri�~al model. Horrever, the evaluation now commonly shared both within and
cutside tre countr~ is that "there are good points and bad points, depending
o:~ tha guidance formula, and this is only natural. It is may not be given
the perrect grade of 100, but it is a fully satisfactory missile."
Surpasses American Products in the Cost Field, Too
Th~ air-to-ship r".SMl missile, which was develbped by Mitsubishi Heavy
- Industri.es and others, is another missile, which the JDA is proud of. It says
that it is better than America's ''Harpoon" missile, which is the same type of
missile, *~ot only in performance alone, but also in the cost field. This is
"~he prcducing of results through thoroughgoing cost control, i-rom the stage
or designing, in order to produce them at low cost" (Technology Research and
Development Institute Director Yukie Or10RI).
Fi;-~ar. ~utonorous develcpr~en~~ of se :�e~al missiles is ~laced on the right
~_,:ct:, the .;,o~:~s o_ :rivate enterprises ~lso become active. It has been
c~ciue~ t::at Tos^i~._, ~rnic':i developed the short SA'9's, c�;i11 next take charge
oY tha develo~T~tnt of ''~ortable SAP~I's," ~~rh:ich wiil b2 surface-~to-air m~ssiles,
i~hi :h can be ~:a;^ricd by SDF personnel. T~ii~ rnissi.le sdopl:s tre homing formula,
�,:i:ici~ c~ri11 catch the invading airplanes as 3n image, through the ~da~~~ation of
chai~ge-couple~l device ICCD) tc:chr.oiogy, used for image-s~nsers in tne
c~~eras For ~.cuseii~ld-use video-tape rec;,rders (VTR).
_ JDA sta: ted to import oortable SAt~i's, called Stingers, frorr~ the US,
f-rom fisc~l 1981. However, even the US has not yet developed missil~s which
u~e ti~e new guidancE formula, using CCD. Toshiba says, witll deep confidence,
t}i~t "in the next ~ortable SAh?'s, the US will also probably use CCD, but our
country is ahead oi the US in ~his field" (Specific Development Division `
Advisor Hirohide i~AKAO of the Electric Wave Instruments Project Department).
The view that "in the missile field, technology developed for civilian-
- use gooris, such as electronics, can be adopted, in order to make the size
smaller and to raise the precision degree, and Japan is more advanced in this
_ kind or improved technology" (Japan '~leapons Industry Association Chairman
~4
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Fua ~F�F~ic~,~t. t!tit: c~Nt.~~
.
Mankichi TATENO), is becoming the generally accepted view. Still Further,
the o~taining ~f prospects for becomin~ able to develop products at a low .
cost, even when the production amour.t is small, as in the case of ASM1, even
in the midst of tne restrictions on weapons axparts, has a big significance~
According to the JDA Technolo~ Research and Developmenfi Institute, the
_ technological level of products in the elec~ronics field, such as missiles,
radar, and fix~earris control systems (FCS), is high, but there is a~tendency
~o lag behind in the fields of under-water weapons, firearms and ammunition.
In other taords, the pattern is that in fields where technology developed ~o
meet civilian demand can be adapted, Japan is strcng, bu~l: in fields where
demand, other than that o?= the JDA, cannot be expected, wea]