termin@killer.DALLAS.TX.US (Jim Thrasher) (01/08/89)
Here is some data to chew on.
In the early 80's the japanese pooled the design talent and expertise
of the leading five companies(in japan) to produce a usable 64k dram. Once
the design was completed the cooperative was broken up and the japanese began
to compete(the world as well as the five companies).
What is the number one objective of a japanese company(maximizing sales). So
each company independently lowered prices of their 64k drams. They were so
successful in selling that several companies complained(Mostek,TI,and
Motorola) and cried "dumping". So U.S. politicians complained to their
japanese equivalents over dumping, and the japanese govt. asked the five
japanese comp. to cut their exports of 64k drams, WHICH THEY DID. The way
they cut exports - was to raise prices and let diminished demand reduce
shipments to the US. This happened early in 1982. The US DEPT OF JUSTICE
noticed that the companies had simultaneously raised prices of the static and
dynamic RAMS. They immediately jumped to the conclusion that the companies
had put their heads together and conspired to fix prices and restrain trade.
The Justive Dept. investigation got under way while the US DEPT. OF COMMERCE
was still investigating those same five companies for "dumping".
** FOR UNBELEIVERS READ CLIPPINGS FROM ELCTRONIC NEWS AUG.2&9 1982
About a year later, after US companies got their production lines up and
running, an interesting thing happened. TI noticing that american buyers were
paying appx. twice what japanese buyers were paying for chips, did exactly
the same thing that the japanese were doing. The people of the US were sold
chips from TI at DOUBLE the price that TI was selling the same chips to
the japanese. (To me from the japanese viewpoint it looks as if TI were
dumping chips on the japanese market).
Another little US company called Micron Technology adopted the two-tier
pricing scheme of TI(why rock the boat), and made good profits(after-tax of
30% of sales/ before-tax of 60%). In the fall of 1984, when the official high-
quantity price for 64k drams was nearly $4 and the "gray" market price was
nearly $3, Micron announdec that it was taking large-quantity orders for
delivery in the 4th quarter of 1984 for 64k at $1.85(200nsec) or
$1.95(150nsec). As you can imagine this caused quite a stir and is credited
with causing the massive price plunge of chips.
IT IS NOT COMMONLY KNOWN THAT ALL MICRON DID WAS DROP ITS US PRICES TO
PARITY WITH ITS JAPANESE PRICES AND THUS BRING AN END TO THE TWO-TIER
PRICING SYSTEM THAT HAD BECOME ENTRENCHED BECAUSE ALMOST EVERYONE(SUPPLIERS)
BENEFITED. Micron did NOT drop its japanese prices!
This came from an article in Jan 1986 and as we know the US companies did
the same thing with the 256k chips.
I am as american as the next guy. But before you cry too much for the poor
american companies(who don't typically care about the little guy), look at
the facts realistically. The only thing wrong with what the japanese have done
is the The American companies didn't do it first.
A disinterested Third party(who pays too damn much for chips/Thanks Reagan).