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Japan's largest chipmaker Elpida files for bankruptcy protection

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© 2012 AFP

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Elpida Elvida (urdu meaning good-bye)

-1 ( +0 / -1 )

This is foreboding.

2 ( +2 / -0 )

what can they do when they go up against chinese firms that are able to manufacture chips at a fraction of the cost and have a government that backs them up with artificially low exchange rates?

3 ( +5 / -2 )

I remember when I bought my tri-channel memory for 20,000 yen back in 2009, it was 3GB. NOw an 8GB mem only cost 5,000 yen....Nobody can make money out of this ridiculous pricing anymore.

Whose to blame? Intel. Intel had a very robust Socket 775 then decided to upgrade to 1366 but to be able to upgrade you have to buy a set of tricahnnel memory, a new CPU which is expensive for just the upgrade...then people did not buy. Second Intel then again decided to introduce anew socket 1156, same story the CPU you bought for 30,000 in the same year will not fit so those who bought felt cheated. Third Intel again changed the socket to 1155 in 2011 and by the end of the year a new socket 2011 was introduced and all of which requires new motherboard, new CPU and new memory...

In a weak economy people stopped buying altogether because its becoming ridiculous. In a span of 5 years there were 4 sockets introduced. LGA 775 stayed for 6 years. AMD socket stayed for 8 years. Then Intel decided to change the rules. Now nobody buys anymore.

-2 ( +4 / -5 )

its not like they havent seen this coming, this hi-tech stuff becomes simple commodity VERY quickly, about time J-companies in these fields SEE this & plan accordingly otheriwise & likely we will see more companies doing a new kamikaze with no target except straight into the ground.

Japan you gotta start changing yr game plans FAST or this cud really get bad, hell its already bad, without changes look for a LOT more movement outta Japan

3 ( +3 / -0 )

what can they do when they go up against chinese firms that are able to manufacture chips at a fraction of the cost and have a government that backs them up with artificially low exchange rates?

There are many things they can do. The first thing is to recognize their business is failing long before they file for bankruptcy and take measures to either downsize or manufacture in more economically viable countries, which is exactly what is happening to many Japanese corporations at present, but only the smart ones.

5 ( +5 / -0 )

"what can they do when they go up against chinese firms that are able to manufacture chips at a fraction of the cost and have a government that backs them up with artificially low exchange rates?"

Don't look too hard, but 70% of chips are produced by South Korean Samsung and Hynix. It's the production technology advantage that allows them to stamp out the fastest and the thinnest chips at a fraction of the cost that can be made in Japan and Taiwan. This is why Samsung had $7 billion in operating profit in chips last year, while all the rest of the producers were deep in red.

-1 ( +2 / -3 )

I am tired of Japanese companies blaming the exchange rate for all of their woes. There are many factors that make a company go bankrupt. I would credit this one to the inability to respond to market conditions due to bloated management that watches out for their own interests as opposed to the interests of the company. I am sure their high salaries are a major reason for the high costs of production. A smart company would have at least hedged it's position as the #1 chip-maker in Japan and acquired other manufacturing factories overseas.

8 ( +9 / -1 )

Now the truth (instead of all the excuses) why Elpida failed, from a source outside of Japan which tells it like it is: Elpida fell behind technologically long time ago:

Elpida was the world’s third-biggest D-Ram maker with 14 per cent global market share, but like others in the industry has had a difficult time competing against Samsung, which has more than half of the market and more advanced technologies that enable it to keeps down the costs of making chips.

http://www.ft.com/intl/cms/s/2/db64c462-6127-11e1-8a8e-00144feabdc0.html#axzz1naOmoBfi

-3 ( +0 / -3 )

I would love to know the monthly salaries of the president, CEO and board of managers at the time of the bankruptcy.

2 ( +3 / -1 )

If you check around, I believe you will find that CEOs of Japanese firms typically make roughly 10 times what the average worker makes. That's near the bottom of a list by countries; Australia is around twice that (i.e., around 22) and the US around 50 times that (i.e., around 500+) in sources I've seen. This has been the general rule in manufacturing companies here for quite a long time.

At least the marginally competent and flat-out incompetent upper managements here aren't usually grotesquely overpaid.

There are of course exceptions, but most of them tend not to be in manufacturing, IMO.

1 ( +1 / -0 )

The mighty are falling. I do believe chicken little is right when it comes to large business in Japan. Perhaps if they hadn't cooked the books for so long, let age lead rather than intelligence Japan wouldn't be in such a downward spiral. Now, the question is, will they learn from this or will they keep repeating the same mistakes claiming they know best?

0 ( +1 / -1 )

At least the marginally competent and flat-out incompetent upper managements here aren't usually grotesquely overpaid.

You're forgetting bonuses - that while for the average worker figures into the salary - don't when it comes to board members. You might want to look at how much TEPCO board members got in bonuses and then make the comparisons.

1 ( +2 / -1 )

So even Japan's advanced technologies are not enough to ride them thru these economic times.................

2 ( +1 / -0 )

sorry Japan your "Japanese is better quality" will not save you unless you stop procrastinating on even simple decisions. and bring about serious change in your business practices, unfortunatley that will mean moving production outside Japan to cheaper countries or make original products at competitive prices that people want to buy. the second may be well out of reach for J companies now. Take a look at Samsung they sold $135billion in product last year, Japans leading company Toyota sold $145billion. The Koreans are fast becoming the next Asian high tech hub even there cars are taking larger market share from J companies in the US winning all the awards along the way.

4 ( +3 / -0 )

Who was the poster that went on about how much better Japanese tech is?!

0 ( +1 / -1 )

I thoroughly expect the downvotes for this but looking at Japan's current situation since the Fukushima disaster started and forecasting ahead along with the economic collapse looming the foregone conclusion is that Japan will soon be finished as a nation (I give it 10~15 years).

Yes, I realize this is a negative and grim sounding prediction but this is the reality of Japan today. I will add that I believe there will be major wars in the world in the coming 1-5 years which will result in major chaos globally so Japan will not be alone.

0 ( +2 / -2 )

Another one? Maybe all Japan is going bankrupt.

but the punishingly high yen and fierce competition have made life difficult.

Certainly one reason among the many others. The third world war has been going on for years, in a novel way. It's called globalism and the difference between the traditional and our new war is just one letter,........ the "T" has changed to "B".

Now they can destroy any countries with banks instead of tanks.

2 ( +2 / -0 )

Who was the poster that went on about how much better Japanese tech is?!

You still don't understand. Japan has monopolised the higher end production of the goods which go into these chips, both Elpida's and Samsung's.

-3 ( +0 / -3 )

^ there he goes again.

Nothing to worry about here, because Japan has monopolized the mysterious "higher end production". It's only 1500 jobs as a start. Let's just move along nothing to see here.

-1 ( +2 / -3 )

Nothing to worry about here, because Japan has monopolized the mysterious "higher end production". It's only 1500 jobs as a start. Let's just move along nothing to see here.

It's only 'mysterious' to people who don't know about it. Japan and Germany monopolise the production of producer's goods, not South Korea and the Samsung chips which are taking over from Elpida are all reliant on Japanese high tech.

-2 ( +0 / -2 )

Samsung chips which are taking over from Elpida are all reliant on Japanese high tech.

If true, why can't Japan make better and faster chips?

-1 ( +2 / -3 )

If true, why can't Japan make better and faster chips?

What do you mean 'if true', it's a fact. Japan has has graduated onto the highest levels of advanced manufacturing. And Elpida losing marketshare over the chips does not mean Samsung's chips are 'better or faster' but simply that they're cheaper than Elpida's. Korea has managed to keep its currency artifically depressed just as Japan managed for years until very recently. And as you yourself stated previously, South Korea runs a trade deficit with Japan every year, because it is wholly dependant on Japanese high tech to create its products. People really don't know what manufacturing is on this site. To give one example, one of the standard arguments that people put forth to convey the 'Japan is in industrial decline!' is how Japan has lost the near total monopoly it had in the 80s in semiconductor production. What people conveniently (or ignorantly) forget to mention is how Japan now monopolises the production of semi-conductor grade silicon which is an even more skill and capital intensive form of manufacturing and which ALL semiconductor companies, Japanese, Korea, Taiwanese and German need for their production.

-2 ( +0 / -2 )

Elpida announced gleefully last year that they had developed the 20 nano chips but they never went into production. Everyone in the Samsung said it's probably hogwash because Elpida had done this time in and time again - and Samsung were proven right once again. In the mean time, Samsung has already started producing them for real, months ago. If Japan is so advanced in chip making, they would still have a company today. Even with cheaper pricing from Koreans, that cannot be the answer to why a company that is supposedly technologically superior cannot sell their superior chips to the market. After all, if you're the only sole owners of the best chips, wouldn't there still be a market for them? oh that's right, that domain belongs to Samsung.

Once again, the old Japanese acronym "because they are cheap" kicks in. It's been the mantra for the Japanese rightists for decades to view their competitors in Korea as inherently inferior to be able to compete with Japan. And it's never going to change. But this is the kind of result that the habit of not taking your competitors seriously, due to race, brings.

-1 ( +2 / -3 )

Elpida announced gleefully last year that they had developed the 20 nano chips but they never went into production. Everyone in the Samsung said it's probably hogwash because Elpida had done this time in and time again - and Samsung were proven right once again. In the mean time, Samsung has already started producing them for real, months ago. If Japan is so advanced in chip making, they would still have a company today. Even with cheaper pricing from Koreans, that cannot be the answer to why a company that is supposedly technologically superior cannot sell their superior chips to the market. After all, if you're the only sole owners of the best chips, wouldn't there still be a market for them? oh that's right, that domain belongs to Samsung.

Read my above post again, all these chips require Japanese high tech to function in the first place, regardless of whether the company which purchases the high tech needed for the chips is Samsung or Elpida! What Elpida itself does or does not to doesn't take away from this fact. No one said Elpida was technologically superior, both the Samsung and Elpida chips are similar, but BOTH remain dependant on the SAME high tech that Japan has monopolised. How is this so hard to understand? The domain for chips can belong to Samsung, but Samsung remain dependant on Japanese high tech which come from different companies to Elpida to make these chips. You seem to not understand that these components are not made in house but need to be purchased from specialists.

Once again, the old Japanese acronym "because they are cheap" kicks in. It's been the mantra for the Japanese rightists for decades to view their competitors in Korea as inherently inferior to be able to compete with Japan. And it's never going to change. But this is the kind of result that the habit of not taking your competitors seriously, due to race, brings.

Samsung has gained a larger market share because their chips are cheaper, that's a fact. Did you notice how the yen rose drastically last year? Read the article again. South Korea won't be able to keep its currency artifically depressed forever either.

-2 ( +0 / -2 )

As Chucky3176 mentioned, Samsung develops chips that are far more advanced then anything Elpida has ever manufactured. It also takes technology and innovation to manufacture chips at an affordable price. New technology, methods, manufacturing processes and efficient resource utilization are all needed to make chips affordable. A properly designed chip needs to be both powerful and cheap in order to be a success. Not only is Japan lacking in the high end tech department but also the price tech+innovation that goes a long with it. Your understanding of tech products is woefully lacking if you believe Korea is winning simply due to the yen.

Korea runs a trade deficit with Japan due to low and mid tier components rather that high tech components. Where exactly do you get this belief that Japan controls high end tech? Your country sells mostly machinery and certain parts that go into cars. Korea could easily make these same components but Japan holds the patents(Japan went patent crazy in the 80s and 90s). Of course these patents are slowly expiring which explains why more and more people are relying on Korean components instead. It also explains why the trade deficit is shrinking and why Japanese companies are now relying on Korean components as well.

Funny thing is that the trend is in reversal now. Koreans are obtaining the patents for newly discovered technologies while Japan is relying more and more on Korean components.

http://www.psfk.com/wp-content/uploads/HLIC/b0a29805980d0c046a5a16c60fe2731e.jpg?fedaf9

-3 ( +1 / -4 )

Samsung has gained a larger market share because their chips are cheaper, that's a fact.

Good heavens lord! You don't know too much about the chip industry do you? It takes high technology to be able to manufacture memory chips cheaply and still be very profitable. The name of the game in the memory chip business is to make fastest chips, as small as you can, which cuts down on costs and boosts your profit. Now, Samsung making $7billion operating profit in the memory chip industry alone last year wasn't just because of cheap currency, when the market price of DRAM chips went for only 74 cents per unit. Even if Samsung strictly relies on cheap currency as you say, it is utterly impossible to make any kind of money based on that market value, unless Samsung had the memory chip production technology that allows them to manufacture chips at unheard of costs. Elpida failed to capitalize on the trend towards smart phones and tablet mobile computing, which is another reason why Koreans now have near monopoly in the high end memory chip industry.

Samsung has gained a larger market share because their chips are cheaper, that's a fact. Did you notice how the yen rose drastically last year? Read the article again. South Korea won't be able to keep its currency artifically depressed forever either

Elpida's demise was written in stone for more than 10 years ago when they started falling behind technologically, well before the Yen's rise and Japanese government subsidies to prop up the business. This isn't something that just started happening recently.

-2 ( +1 / -3 )

Here's the link I posted earlier, I suggest you read it this time.

Elpida was the world’s third-biggest D-Ram maker with 14 per cent global market share, but like others in the industry has had a difficult time competing against Samsung, which has more than half of the market and more advanced technologies that enable it to keeps down the costs of making chips

< http://www.ft.com/intl/cms/s/2/db64c462-6127-11e1-8a8e-00144feabdc0.html#axzz1naOmoBfi>**

-3 ( +0 / -3 )

Here's another outsider view that directly contradicts your false assertions.

http://blogs.wsj.com/deals/2012/02/27/options-narrowing-for-elpida/

Samsung and Hynix both have the scale and advanced process technology to expand on their own. Buying an ailing Japanese company with poorer technology wouldn’t make sense.

As noted in the article, Taiwanese too are in vulnerable position. That will only leave Samsung, Hynix, and Micron Chips of the US as the only serious players in the memory chip industry. Ironically, Japan will have to start importing from Korean chip makers if they want advanced chips in their machines. But knowing Japan, they'll never accept that, and will instead either continue to manufacture for the domestic market only at a huge loss, or entirely opt out of upgrading their machines altogether, which will only hurt their own industries.

-3 ( +0 / -3 )

so govt comes in with tax payers money, saves them, after investor money, average joes money, disappears. the only people that win are the company execs who are connected to politicians. thats where my tax money goes. scammers. i never feel bad for scamming back the govt, or lying about my taxes or or. what a corrupt system, but still beats the corrupt system of 3rd world countries. if u cant beat them, secretly join them.

0 ( +0 / -0 )

Good heavens lord! You don't know too much about the chip industry do you? It takes high technology to be able to manufacture memory chips cheaply and still be very profitable. The name of the game in the memory chip business is to make fastest chips, as small as you can, which cuts down on costs and boosts your profit. Now, Samsung making $7billion operating profit in the memory chip industry alone last year wasn't just because of cheap currency, when the market price of DRAM chips went for only 74 cents per unit. Even if Samsung strictly relies on cheap currency as you say, it is utterly impossible to make any kind of money based on that market value, unless Samsung had the memory chip production technology that allows them to manufacture chips at unheard of costs. Elpida failed to capitalize on the trend towards smart phones and tablet mobile computing, which is another reason why Koreans now have near monopoly in the high end memory chip industry.

As Chucky3176 mentioned, Samsung develops chips that are far more advanced then anything Elpida has ever manufactured. It also takes technology and innovation to manufacture chips at an affordable price. New technology, methods, manufacturing processes and efficient resource utilization are all needed to make chips affordable. A properly designed chip needs to be both powerful and cheap in order to be a success. Not only is Japan lacking in the high end tech department but also the price tech+innovation that goes a long with it. Your understanding of tech products is woefully lacking if you believe Korea is winning simply due to the yen.

Good heavens yourself! Neither of you have read what I said, I NEVER defended Elpida, name one post where I did. I simply stated that both Elpida (which has failed) and Samsung (which has not) are both reliant on Japanese high tech to even create their chips in the first place! Why is that failing to sink in? Yes Samsung outstripped Elpida when it came to costs (which is hugely important, don't try and downplay it) and Samsung adapting new technologies more successfully. But Samsung still needs the high tech for those chips that only the Japanese know how to make and which have nothing do to with Elpida! And don't forget, Samsung is a massive chaebol which accounts for 20% of the Korean economy and had more money in which to fund its chip making companies, a luxury which Elpida, a stand alone company, could not afford.

Korea runs a trade deficit with Japan due to low and mid tier components rather that high tech components. Where exactly do you get this belief that Japan controls high end tech? Your country sells mostly machinery and certain parts that go into cars. Korea could easily make these same components but Japan holds the patents(Japan went patent crazy in the 80s and 90s). Of course these patents are slowly expiring which explains why more and more people are relying on Korean components instead. It also explains why the trade deficit is shrinking and why Japanese companies are now relying on Korean components as well.

Funny thing is that the trend is in reversal now. Koreans are obtaining the patents for newly discovered technologies while Japan is relying more and more on Korean components.

http://www.psfk.com/wp-content/uploads/HLIC/b0a29805980d0c046a5a16c60fe2731e.jpg?fedaf9

Actually, the trade deficit IS related to the high tech that is bought from Japan and which South Korean producers need to make their goods and components. People still don't know what producer's goods are and what advanced manufacturing is. You're both posting links which tell me the Koreans are taking market share from the Japanese when it comes to chip making, which shows both of you still miss the point when Japan now monopolises higher end manufacturing beyond chip making. Japan makes the goods the producers need to make the components that go into the goods other companies release. Japan also dominates the production of capital goods which the Koreans are nowhere near.

Here's the link I posted earlier, I suggest you read it this time.

Elpida was the world’s third-biggest D-Ram maker with 14 per cent global market share, but like others in the industry has had a difficult time competing against Samsung, which has more than half of the market and more advanced technologies that enable it to keeps down the costs of making chips

< http://www.ft.com/intl/cms/s/2/db64c462-6127-11e1-8a8e-00144feabdc0.html#axzz1naOmoBfi>**

Here's another outsider view that directly contradicts your false assertions.

http://blogs.wsj.com/deals/2012/02/27/options-narrowing-for-elpida/

Samsung and Hynix both have the scale and advanced process technology to expand on their own. Buying an ailing Japanese company with poorer technology wouldn’t make sense.

As noted in the article, Taiwanese too are in vulnerable position. That will only leave Samsung, Hynix, and Micron Chips of the US as the only serious players in the memory chip industry. Ironically, Japan will have to start importing from Korean chip makers if they want advanced chips in their machines. But knowing Japan, they'll never accept that, and will instead either continue to manufacture for the domestic market only at a huge loss, or entirely opt out of upgrading their machines altogether, which will only hurt their own industries.

Elpida's failure and Korean companies taking over market share in chip making does not contradict any 'false assertions'. Let me say it again, Japan has moved further onto advanced manufacturing where it now dominates the production of the producer's goods needed for Samsung to make their chips, so even if Samsung gains a monopoly in chip making, they'll STILL be totally reliant on Japanese high tech to even make these chips in the first place!

-2 ( +0 / -2 )

And there you have it, as oginome says, so it must be true. All is well in Japan, they have moved onto the "advanced manufacturing"! (whatever that maybe).

-2 ( +1 / -3 )

And there you have it, as oginome says, so it must be true. All is well in Japan, they have moved onto the "advanced manufacturing"! (whatever that maybe).

Just because you don't know what it is doesn't make it any less of a reality.

-1 ( +0 / -1 )

Advanced manufacturing means Nano technology. Nano represent 1 is divided by 1000000000. It is true than Japan is superior in making thing smaller and thinner. It is strong in craft. China is good in mass manufacturing with incredible supply chain. Korea is very good in presentation and innovating of model. Back in 1990s, Samsung was struggling with debt too. Samsung shares were bought by europe. Management and technology were transfered from Europe too.Such as Germany. Korea Hyundai learnt a lot from Germany BMW. Such as I30. DRAM chip business was transformed too. Government susidied a lot to indursty like China.

The moral of this article was expanding business without demand will fail. Market will be matured like human. It will be degenerated and collapsed. Nothing will last forever. Back in 1997, South Korea faced the huge problem for repaying the oversea loans. It was caused by fiancing of the huge capital to Large co-operations.

0 ( +0 / -0 )

Well in that case, those "advanced manufacturers" will now have to sell to Samsung strictly to stay alive, because at least half their customers (Elpida), are now gone. That doesn't bode well for your ghost advanced company's future. Do you know what Japan's currency swap with Korea is? I ask because so many Japanese on-line seem to have so precious knowledge about economics, thus keep feeding misinformation.

-3 ( +0 / -3 )

I'm sorry Zeppun, but Samsung leads in the race for the smaller and thinner nano chips. This race to the top resembles the race between tortoise (Korea) and the rabbit (Japan). The tortoise ended up winning the race because the rabbit thought it was the defacto winner. From last year's news:

http://english.donga.com/srv/service.php3?biid=2011092332888

Samsung reaffirmed its dominance in the memory chip market Wednesday, when it marked the start of its mass production of 20-nano DRAM and flash memory chips at its plant in Giheung, Gyeonggi Province. The structure of the global semiconductor production market as characterized by one tiger (Samsung) and three cats (Hynix Semiconductor, Elpida Memory and Micron Technology) remains unchanged. Japan’s Elpida raised eyebrows in May by announcing a plan to mass produce the world’s first 25-nano DRAM chips from July. The company, however, has come up with just prototypes and failed to challenge Samsung’s 18-year reign. Hynix, the world’s No. 2 maker of memory chips, will begin to mass produce 20-nano chips early next year. As one nano-meter is one-billionth of a meter, a chip`s circuit width of 1/4,000th of a human hair is hard to imagine. Samsung plans to churn out 10-nano DRAM chips next year that are considered the technological limit. In the past, the company simply mass produced DRAM and NAND flash memory chips that have been developed by more advanced companies in the U.S. and Japan. The Korean chipmaker developed the world’s first nano DRAM chips in 2006, however, and has since led the global market by introducing more advanced products every year. The follower has become the leader.

-3 ( +0 / -3 )

Well in that case, those "advanced manufacturers" will now have to sell to Samsung strictly to stay alive, because at least half their customers (Elpida), are now gone.

The chips that are no longer sold because Elpida has gone doesn't mean the overall number of chips being produced will drop in the long term. Do you understand what market share is? It means Samsung will make up for those no longer being produced by Elpida. And they'll still all remain completely reliant on Japanese high tech, these Samsung DRAMs need the wafers from Shin-Etsu and Sumco.

Do you know what Japan's currency swap with Korea is? I ask because so many Japanese on-line seem to have so precious knowledge about economics, thus keep feeding misinformation.

I'm not Japanese. And the currency swap was expanded last year because of the volatile situation in the global economy and to help both countries, such as giving Korea better liquidity.

-2 ( +0 / -2 )

I'm sorry Zeppun, but Samsung leads in the race for the smaller and thinner nano chips. This race to the top resembles the race between tortoise (Korea) and the rabbit (Japan). The tortoise ended up winning the race because the rabbit thought it was the defacto winner. From last year's news:

I'm sorry, but you still don't understand those DRAM chips are dependant on high tech from Japan.

-2 ( +0 / -2 )

I'm sorry oigonome, but you are misinformed again! Koreans run their own advanced wafer facilities, you must be joking! This is an article from 2008.

http://www.siltronic-samsung-wafer.com/ViewFullContent.aspx?contentid=80&menuid=20&submenuid=80&versionId=1

You need to update your misinformation, you're still living in the 1990's.

http://teknologi.ee.itb.ac.id/node/119

-3 ( +0 / -3 )

LG Siltron supplies both Samsung and Hynix wafer needs.

http://www.eetimes.com/electronics-news/4214615/Korean-wafer-maker-plans--450M-IPO--say-reports

As you can see, Korea doesn't totally depend on Japan to get their wafers. For Samsung and Hynix, Japan is just another alternative supplier when the supplies gets tight due to whatever reason.

-3 ( +0 / -3 )

Wow, you need to educate yourself. Certainly not living in 2011. All these wafers are derived from grade silicon ingots which only Japan knows how to make! The less sophisticated task of making the wafers come from slicing the ingots and then polishing the slices. Japanese, Korean and other companies rely completely on this particular piece of Japanese high tech to make their wafers in the first place. And even in this lower end wafer production, though there is Korean competition, Japan still dominates. But even if Korea monopolised wafer production tomorrow, they'd STILL need the ingots. Try again.

-2 ( +0 / -2 )

Readers, please stop bickering.

LG Siltron supplies both Samsung and Hynix wafer needs.

LG Siltron needs those ingots unfortunately.

As you can see, Korea doesn't totally depend on Japan to get their wafers. For Samsung and Hynix, Japan is just another alternative supplier when the supplies gets tight due to whatever reason.

Korea TOTALLY depends on Japanese high tech for their wafers. The wafer companies in Korea need those ingots.

-2 ( +0 / -2 )

All these wafers are derived from grade silicon ingots which only Japan knows how to make!

That's not entirely true, considering that five companies from Japan, United States, and Germany, dominate in that business. But I do give you half a point there, since Japan leads the production. But are you aware that Samsung LED is set to start producing their own ingots in Korea beginning of 2012? Are you aware that the profit margin of ingots has gone from 70% to just 6% and falling in 2009?

Let me ask you this then. What's more profitable, to sell pieces of key items and make pennies on the dollar, versus purchasing those key items from Japan, turning them into finished products, and selling them for over half the margin? Look at the iPhone. Samsung takes $80 for every iPhone sold, but Apple takes home $300 for every iPhone sold. Who's in the better profitable position, Samsung who is a supplier, or Apple who is the producer? (forget your assertions that Japan is responsible for every technology for a minute here, for the sake of argument).

-3 ( +0 / -3 )

about time. sick of bailing these too big to fail companies.

0 ( +0 / -0 )

That's not entirely true, considering that five companies from Japan, United States, and Germany, dominate in that business. But I do give you half a point there, since Japan leads the production. But are you aware that Samsung LED is set to start producing their own ingots in Korea beginning of 2012? Are you aware that the profit margin of ingots has gone from 70% to just 6% and falling in 2009?

Actually that is entirely true. Japan, with its Shin-Etsu and Sumco companies, does have a full monopoly in the production of semicondor grade silicon ingots, you're getting that confused with the lower end wafering again. Germany's Wacker Chemie for example, makes a semi-purified form known as 'poly'. Japan leads in wafering, but has completely monopolised the higher end production of ingots needed for this wafering. And the Samsung production of ingots starting from 2012 is actually a joint venture with Sumitomo which is part of the Sumco group which has this high tech. We aren't talking about profit margins here, but the dominance in advanced manufacturing which Japan has.

Let me ask you this then. What's more profitable, to sell pieces of key items and make pennies on the dollar, versus purchasing those key items from Japan, turning them into finished products, and selling them for over half the margin? Look at the iPhone. Samsung takes $80 for every iPhone sold, but Apple takes home $300 for every iPhone sold. Who's in the better profitable position, Samsung who is a supplier, or Apple who is the producer? (forget your assertions that Japan is responsible for every technology for a minute here, for the sake of argument).

Even though the profit margins may be smaller, once you gain a monopoly in the highest areas of advanced technology, you gain chokepoints and strongholds over the most integral part of the supply chain. This type of manufacturing takes many years to gain entry into and dominance in these highly specialist fields provide further opportunities to tackle even more tougher and complex challenges, with further capital and skill intensive targeting in these areas lending themselves to even more development. The massive trade surpluses of Japan (pre-nuclear disaster) and Germany are based on this advanced manufacturing dominance and this niche targeting, specialisation and capital goods production takes form in both countries in a manufacturing economy where 99% of the firms are SMEs (small to medium sized companies) employing less than 300 people each and over 70% of the working population as a whole. It is entirely possible to have a healthy, functioning economy based on advanced manufacturing. The trade surpluses are not based entirely on the big companies and never have been. Apple, the biggest company in the world, which scores record profits, is dependant on components and supplies from Japan and Germany (and Korea) to make all its products, so the more companies like Apple expand, the more they will need these supplies and components. And if a monopoly is attained in a particular area, then companies all around the world will be dependant some way on this product only you know how to make. America can't manufacture anymore and that's why it hasn't seen a trade surplus since the early 80s, no matter how many huge, successful companies it has created over the past 30 years. These companies are dependant on advanced manufacturing Japan and Germany have monopolised, so even if Apple scores a higher profit, it will STILL need these components, since it can't make them.

-2 ( +0 / -2 )

Round and round we go. So let me ask you this.

Talking about monopoly, now that Japan doesn't have a memory chip industry anymore, where will they get their chips from, after Korean companies takes over most of Elpida's market and have a near monopoly in memory chips? Logic tells me Korea. But I don't know.. with the fierce Japanese product nationalism unmatched by anywhere. Hell will have to freeze over before Japan buys anything made in Korea products, other then kimchi. Japan will probably forgo computing before they buy anything from Korea.

I got news for you. In Korea, Japan doesn't even figure into anything anymore, other then one thing: a good case example of how not to be like one. The lessons of Japan with their underestimating of their rivals is a lesson to Koreans that Korea can end up being like Japan if they let arrogance have its way. Korea is extremely worried about China, and have far more respect for the Chinese companies abilities to catch up, than Japan's dying companies which once ruled the world. Sadly for Japan, Japan is becoming more and more a non factor everyday.

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Talking about monopoly, now that Japan doesn't have a memory chip industry anymore, where will they get their chips from, after Korean companies takes over most of Elpida's market and have a near monopoly in memory chips? Logic tells me Korea. But I don't know.. with the fierce Japanese product nationalism unmatched by anywhere. Hell will have to freeze over before Japan buys anything made in Korea products, other then kimchi. Japan will probably forgo computing before they buy anything from Korea.

Elpida's bankruptcy doesn't change Korea's chip industry's reliance on Japan's advanced manufacturing. Oh and please, South Korea is just as protectionist as Japan is. Buying non-Korean and especially Japanese products is frowned upon in that country. Both countries are fiercely nationalistic and xenophobic and share the same attitude of contempt toward each other. South Korea also doesn't want to buy anything Japanese, but since Japan dominates the high tech they need, they have no choice.

I got news for you. In Korea, Japan doesn't even figure into anything anymore, other then one thing: a good case example of how not to be like one. The lessons of Japan with their underestimating of their rivals is a lesson to Koreans that Korea can end up being like Japan if they let arrogance have its way. Korea is extremely worried about China, and have far more respect for the Chinese companies abilities to catch up, than Japan's dying companies which once ruled the world. Sadly for Japan, Japan is becoming more and more a non factor everyday.

But how would you know, considering you're not even aware of what advanced manufacturing is. Even when you were told about ingots, you still persisted with 'Germany, USA also dominating' when they REALLY really don't. Do you know the difference between ingots and wafering now? Japan still figures VERY much with Korea, which shows in the yearly deficit they run with Japan since they need the high tech they can't produce themselves. So then, if Japan is becoming more of a non-factor, then Germany must be too right? Just because advanced manufacturing isn't as visible as chips and semiconductors it still exists, is important and it's the reason why these two countries retain strong industrial sectors, especially compared to most other developed nations.

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lpida's bankruptcy doesn't change Korea's chip industry's reliance on Japan's advanced manufacturing. Oh and please, South Korea is just as protectionist as Japan is. Buying non-Korean and especially Japanese products is frowned upon in that country. Both countries are fiercely nationalistic and xenophobic and share the same attitude of contempt toward each other. South Korea also doesn't want to buy anything Japanese, but since Japan dominates the high tech they need, they have no choice.

Actually no. Nobody can match Japan's fierce product nationalism, even S.Korea. If you come to Korea, you can notice at least there are Japanese made cars, and once upon a time, Japanese electronic products were revered as top quality items (that no longer is the case now). People also buy Japanese fashion, and other items that are made in Japan. Go the other way to Japan, the number of Korean items that sell in Japan is exactly zero, as Korean made items are made fun of as inferior garbage junk made by inferior people.

But how would you know, considering you're not even aware of what advanced manufacturing is. Even when you were told about ingots, you still persisted with 'Germany, USA also dominating' when they REALLY really don't. Do you know the difference between ingots and wafering now? Japan still figures VERY much with Korea, which shows in the yearly deficit they run with Japan since they need the high tech they can't produce themselves. So then, if Japan is becoming more of a non-factor, then Germany must be too right? Just because advanced manufacturing isn't as visible as chips and semiconductors it still exists, is important and it's the reason why these two countries retain strong industrial sectors, especially compared to most other developed nations.

You keep mentioning advanced manufacturing advanced manufacturing. Take the ingots, the share of the components make up for RAM, is so small to really make a big difference to overall Japan's jobs and Japan's manufacturing competitiveness. It is a tiny portion of your manufacturing industry which is rapidly shrinking, and there is no guarantee that Japan will continue to be the dominant player in those fields either. Your belief that somehow only Japanese are smart enough to figure out making those things is just arrogant, when the pattern has clearly shown that one by one, others have overtaken all the industries that were once thought to be only Japan can make them. And you have not answered my question, where's Japan going to get their memory chips from, when the most advanced and fastest chips are made in Korea? The logic tells me Japan will have to rely on Korea. Japan sells six cents worth of ingots, but will have to buy and import $1.04 (current DRAM market value after Elpida went bankrupt) worth of RAM. But you never know with Japan! With their mindset, they may just give up computing altogether rather then buying from Korea..lol.. and still believe they are still number one! lol.

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Actually no. Nobody can match Japan's fierce product nationalism, even S.Korea. If you come to Korea, you can notice at least there are Japanese made cars, and once upon a time, Japanese electronic products were revered as top quality items (that no longer is the case now). People also buy Japanese fashion, and other items that are made in Japan. Go the other way to Japan, the number of Korean items that sell in Japan is exactly zero, as Korean made items are made fun of as inferior garbage junk made by inferior people.

Actually yes. The Koreans are just as nationalistic as the Japanese are. You've been to Korea and haven't noticed that? And it's RARE to find Japanese cars on Korean roads. And please, if you're going to talk about Koreans buying Japanese fashion, then also mention the K-Pop boom and popularity of Korean dramas in Japan.

You keep mentioning advanced manufacturing advanced manufacturing. Take the ingots, the share of the components make up for RAM, is so small to really make a big difference to overall Japan's jobs and Japan's manufacturing competitiveness. It is a tiny portion of your manufacturing industry which is rapidly shrinking, and there is no guarantee that Japan will continue to be the dominant player in those fields either. Your belief that somehow only Japanese are smart enough to figure out making those things is just arrogant, when the pattern has clearly shown that one by one, others have overtaken all the industries that were once thought to be only Japan can make them. And you have not answered my question, where's Japan going to get their memory chips from, when the most advanced and fastest chips are made in Korea? The logic tells me Japan will have to rely on Korea. Japan sells six cents worth of ingots, but will have to buy and import $1.04 (current DRAM market value after Elpida went bankrupt) worth of RAM. But you never know with Japan! With their mindset, they may just give up computing altogether rather then buying from Korea..lol.. and still believe they are still number one! lol.

I keep mentioning advanced manufacturing because you don't get what it is. I used the the ingot production as ONE example of this dominance, which exists and is real. And how is saying Japan dominates advanced manufacturing arrogant? It's the truth. I never said that Korea won't one day catch up, but it takes a lot of time. You don't just suddenly figure out how to make these producer goods, it's a process which takes many years of R&D, look Samsung, with all its funding and technological expertise, STILL can't produce ingots and that's why it has to go into a joint venture with Sumitomo. And I answered your question already, even if the Japanese buy Korean chips, these chips will still rely on Japanese high tech in the first place! Korea will still rely on Japan, just keep looking at the deficit figures - yep, due to Japanese high tech. And Japan is certainly not resting on its laurels when it comes to advanced manufacturing, look at the R&D spending, and then maybe you should read the stories of innovation in the technology section, which no one ever seems to comment on, just the failures like Elpida. You still haven't answered about Germany. They post stunning surpluses every year, and say themselves it's based largely on this ADVANCED MANUFACTURING dominance. You don't seem to understand that in the pursuit of ADVANCED MANUFACTURING, larger lower end companies get replaced by more numerous, smaller, higher end companies which specialise in the more advanced components, which separately have lower profit margins, but since there are more of these companies, make up collectively for what the lower end companies made.

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Actually, the trade deficit IS related to the high tech that is bought from Japan and which South Korean producers need to make their goods and components. People still don't know what producer's goods are and what advanced manufacturing is. You're both posting links which tell me the Koreans are taking market share from the Japanese when it comes to chip making, which shows both of you still miss the point when Japan now monopolises higher end manufacturing beyond chip making. Japan makes the goods the producers need to make the components that go into the goods other companies release. Japan also dominates the production of capital goods which the Koreans are nowhere near.

Those "high tech" components you refer to are not high technology at all. Korea is more then capable of building meager car components. The only thing stopping them from doing so are the patent laws that Japan picked up many years ago. Those patents are slowly expiring and Korean car makers are now building their own parts. In fact, Japanese car makers are buying more and more Korean components each year. Its only a matter of time before those Japanese component makers you refer to are no longer competitive. Its already happening as we speak. This article is a prime example. Japans largest microchip maker files the biggest corporate bankruptcy in Japanese history because it can no longer compete.

But according to you, Elpida went bankrupt on purpose in order to graduate into the more lucrative world of building car windows lol.

Elpida's failure and Korean companies taking over market share in chip making does not contradict any 'false assertions'. Let me say it again, Japan has moved further onto advanced manufacturing where it now dominates the production of the producer's goods needed for Samsung to make their chips, so even if Samsung gains a monopoly in chip making, they'll STILL be totally reliant on Japanese high tech to even make these chips in the first place!

You are in a severe case of denial. Japan didn't move/graduate into advanced manufacturing, they were kicked out once they were no longer competitive. Notice that the largest and most profitable companies in the world actually sell entire products(Apple, Samsung, Microsoft, GM) rather than merely manufacturing components. I'm pretty sure Toyota makes a heck of a lot more money selling an entire car then the guy who sells the mirrors that go into each car. Samsung by itself is currently larger then ten of the largest Japanese electronics companies combined. But thats because those electronics companies decided to graduate into manufacturing "advanced" parts correct?

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Actually no oginome. I don't think you've never been to Korea. Japanese cars sold more in Korea, than in Japan at one point, before the Toyota fiasco. Granted, Korea's not a haven for foreign car makers, but comparing just to Japan.... lol...

http://www.shiotsu-used-car.com/blog/japanesecarspopularinkorea.htm

There are Honda, Toyota, Nissan, and even Subaru dealers. And of course, Lexus has always been a popular car. One of the hottest imports is the Nissan Cube (I don't know why, it's so ugly, noisy, and power is underwhelming) popularity due to pop singer Lee Hyo-ri driving that car. But the most popular import models are from Germany, by far. Hyundai tried to sell their cars in Japan, but ended up closing shop because nobody bought them. Samsung also tried to sell their TV's, but ended up closing shop because nobody bought them. Japanese often claim that this is proof why Korean products are a joke - because Japan is the only country in the face of the earth (possibly except for North Korea), where Samsung can't sell their products to, not because of any tariffs or barriers, but because of people's nationalism and racism.

I keep mentioning advanced manufacturing because you don't get what it is. I used the the ingot production as ONE example of this dominance, which exists and is real. And how is saying Japan dominates advanced manufacturing arrogant? It's the truth. I never said that Korea won't one day catch up, but it takes a lot of time. You don't just suddenly figure out how to make these producer goods, it's a process which takes many years of R&D, look Samsung, with all its funding and technological expertise, STILL can't produce ingots and that's why it has to go into a joint venture with Sumitomo. And I answered your question already, even if the Japanese buy Korean chips, these chips will still rely on Japanese high tech in the first place! Korea will still rely on Japan, just keep looking at the deficit figures - yep, due to Japanese high tech. And Japan is certainly not resting on its laurels when it comes to advanced manufacturing, look at the R&D spending, and then maybe you should read the stories of innovation in the technology section, which no one ever seems to comment on, just the failures like Elpida. You still haven't answered about Germany. They post stunning surpluses every year, and say themselves it's based largely on this ADVANCED MANUFACTURING dominance. You don't seem to understand that in the pursuit of ADVANCED MANUFACTURING, larger lower end companies get replaced by more numerous, smaller, higher end companies which specialise in the more advanced components, which separately have lower profit margins, but since there are more of these companies, make up collectively for what the lower end companies made.

Yes look at the Korean trade deficit with Japan, it shrunk by 35% last year, to $23 billion, yet Korea did fine. Another fact - 30% of deficit is from Japanese consumer goods. 35% are from Japanese steel due to not enough capacity in Korea. That leaves about 35% for import of Japanese capital goods which you are talking about (and not all of it is advanced high tech as you claim). My point: reliance on Japan is shrinking and will continue to shrink, as Korea switches their suppliers to Germany and US (whom Korea has a new FTA which makes their capital goods much cheaper than Japan).

Sure, Japan still has strong base science manufacturing, but how many jobs do they create for Japan, can those people who lost their jobs at Elpida and those people who will lose their jobs because their companies who depend on supplying Elpida, can no longer do business, be able to find new jobs as new advanced technology suppliers? Those people who make ingots, they're going to be competing with ingots made in Korea (however you look at it, it's going to be Korean workers making them under 50/50 joint venture). They better lower their prices because now their sole customers are going to be Koreans. Talk about reliance! Go look back in history at how America lost out their manufacturing base to Japan. You sound just like those bitter Americans of old, talking about those stupid cheap labor Japanese, making cheap products. They laughed at Japan, just like Japanese are laughing at Koreans. lol. The difference is eventhough America lost much of their manufacturing base, they were successful creating software and service. Japan on the other hand, stubbornly clings to the notion that they are the most superior so no need to change (your attitude that shows in your comments here).

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Those "high tech" components you refer to are not high technology at all. Korea is more then capable of building meager car components. The only thing stopping them from doing so are the patent laws that Japan picked up many years ago. Those patents are slowly expiring and Korean car makers are now building their own parts. In fact, Japanese car makers are buying more and more Korean components each year. Its only a matter of time before those Japanese component makers you refer to are no longer competitive. Its already happening as we speak. This article is a prime example. Japans largest microchip maker files the biggest corporate bankruptcy in Japanese history because it can no longer compete.

Actually you still don't understand, these components that the Koreans would all be able to make if the patents expired tomorrow still need the high tech that Japan has monopolised in order to create said components in the first place. You don't get that semiconductors and chips don't stand at the apex of manufacturing, there is a level beyond that which is more skill and capital intensive. Japan dominates this area.

But according to you, Elpida went bankrupt on purpose in order to graduate into the more lucrative world of building car windows lol.

lol, when I did I say that, lol. Elpida failed because of costs and not adapting to new technologies, it's failure doesn't reflect on Japan's advanced manufacturing lol.

You are in a severe case of denial. Japan didn't move/graduate into advanced manufacturing, they were kicked out once they were no longer competitive. Notice that the largest and most profitable companies in the world actually sell entire products(Apple, Samsung, Microsoft, GM) rather than merely manufacturing components. I'm pretty sure Toyota makes a heck of a lot more money selling an entire car then the guy who sells the mirrors that go into each car. Samsung by itself is currently larger then ten of the largest Japanese electronics companies combined. But thats because those electronics companies decided to graduate into manufacturing "advanced" parts correct?

No, you're in a severe case of not getting it. Japan most definitely did graduate onto advanced manufacturing and have NOT been kicked out by the Koreans. The Koreans do chip making and semiconductor production today - the Japanese produce the goods and high tech needed for those chips and semiconductors. Do you understand yet? And these 'companies' themselves largely didn't graduate onto advanced manufacturing, it was mostly new companies that were created over the last 20 years, due to Japan's R&D spending, that specialise in these areas. The individual proft margins are thinner, but there are MORE of these companies which make up for that overall. Someone still doesn't understand.

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Actually no oginome. I don't think you've never been to Korea. Japanese cars sold more in Korea, than in Japan at one point, before the Toyota fiasco. Granted, Korea's not a haven for foreign car makers, but comparing just to Japan.... lol...

http://www.shiotsu-used-car.com/blog/japanesecarspopularinkorea.htm

There are Honda, Toyota, Nissan, and even Subaru dealers. And of course, Lexus has always been a popular car. One of the hottest imports is the Nissan Cube (I don't know why, it's so ugly, noisy, and power is underwhelming) popularity due to pop singer Lee Hyo-ri driving that car. But the most popular import models are from Germany, by far. Hyundai tried to sell their cars in Japan, but ended up closing shop because nobody bought them. Samsung also tried to sell their TV's, but ended up closing shop because nobody bought them. Japanese often claim that this is proof why Korean products are a joke - because Japan is the only country in the face of the earth (possibly except for North Korea), where Samsung can't sell their products to, not because of any tariffs or barriers, but because of people's nationalism and racism.

Sorry, Korea is JUST as protectionist as Japan. Just because Hyori Lee drives a Nissan Cube and sets a trend amongst her fans doesn't mean much in the overall scheme of things. Japan's import car market is 2.6 times the size of Korea. Oh look, Japan's population is also 2.6 times the size of Korea's! Both markets are equally as protectionist. Most Koreans drive Korean and are resolute in their determination to keep on doing so. The import car markets in both countries is the same size. Do your research. Just because this import car market in Korea consists of both Japanese and European cars while the import market in Japan is made up of simply European cars doesn't make Korea any less protectionist.

Yes look at the Korean trade deficit with Japan, it shrunk by 35% last year, to $23 billion, yet Korea did fine. Another fact - 30% of deficit is from Japanese consumer goods. 35% are from Japanese steel due to not enough capacity in Korea. That leaves about 35% for import of Japanese capital goods which you are talking about (and not all of it is advanced high tech as you claim). My point: reliance on Japan is shrinking and will continue to shrink, as Korea switches their suppliers to Germany and US (whom Korea has a new FTA which makes their capital goods much cheaper than Japan).

A trade deficit is still a trade deficit, regardless of whether it shrank in the same year which also happened to be Japan's worst in the post war era. South Korea still needs the high tech and capital goods which Japan has MONOPOLISED. They can't switch suppliers to America, when America largely can't make those goods, and even those components the Americans make are able to make are still reliant on Japanese high tech.

Sure, Japan still has strong base science manufacturing, but how many jobs do they create for Japan, can those people who lost their jobs at Elpida and those people who will lose their jobs because their companies who depend on supplying Elpida, can no longer do business, be able to find new jobs as new advanced technology suppliers? Those people who make ingots, they're going to be competing with ingots made in Korea (however you look at it, it's going to be Korean workers making them under 50/50 joint venture). They better lower their prices because now their sole customers are going to be Koreans. Talk about reliance! Go look back in history at how America lost out their manufacturing base to Japan. You sound just like those bitter Americans of old, talking about those stupid cheap labor Japanese, making cheap products. They laughed at Japan, just like Japanese are laughing at Koreans. lol. The difference is eventhough America lost much of their manufacturing base, they were successful creating software and service. Japan on the other hand, stubbornly clings to the notion that they are the most superior so no need to change (your attitude that shows in your comments here).

Actually, why you don't understand is that 99% of manufacturing firms in Japan are SMEs, which employ less than 300 people each and 70% of the population as a whole. Specialisation and niches has BECOME Japan's manufacturing industry for the most part. And I never heaped scorn on Korea. I already said that Korea will be able to reach Japan's level some day, but it will take a lot of time and R&D, it's not just something they can jump into because costs are too high, lol. Please don't use disaster zone America as a postive example of anything, they decided to forsake their advanced manufacturing in the 70s and as a result can't make anything anymore. 'Software and service' - no, this doesn't make up for it. We can see Japan's dominance and America's continued decline in for example, the case of Boeing. Each new model which have been released over the years, has shown an increased reliance on Japanese technology, lol. I notice how you're still ignoring Germany, whose economy is in rude health, based on their own advanced manufacturing dominance. Like Japan they specialise in the most miniturised, highest skill requiring components and capital goods. Both Japan and Germany have much stronger economies than America. Don't use America as some example to follow.

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Actually Korea IS winning simply due to the yen. If you look up the Korean governments own estimate, for every drop in the yen the korean gdp growth will go down by a certain small %. In fact at the current yen rate everything sold by Japan is sold at a LOSS. Every chip Elpida sold, they LOST money. If you don't think this is a big problem than you simply do not understand business and economics. The yen needs to go above $1=90 yen to make reasonable profits to be able to invest in future products. The break even rate is at 85, and right now it is 81..and has been below the break even point for a long time and has been below the "profit" margin for a few years now. Japan had a RECORD surplus with Korea in 2010, despite the strong yen, obviously if Japan was not handicapped it would outcompete Korea easily..the proof is in the surplus of 2010 which grew everysingle year.

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Actually you still don't understand, these components that the Koreans would all be able to make if the patents expired tomorrow still need the high tech that Japan has monopolised in order to create said components in the first place. You don't get that semiconductors and chips don't stand at the apex of manufacturing, there is a level beyond that which is more skill and capital intensive. Japan dominates this area.

Its not that I don't understand, its that your argument contradicts reality. Those components you refer to are not high technology. Designing slick new and fast chips is high technology. Providing car windows isn't. Korea provides chips and yes components to Japan as well. You seem to hold this delusional view that only Japan supplies components rather than vice versa. As Chucky mentioned earlier, 35% of the trade deficit comes from steel alone. Korea imports steel from Japan due to convenience of location and growing demand. When demand outstrips supply, you need to import materials and parts to satisfy growth. Thats the situation Korea is in and Japan sure as hell isn't(poor economy). Most of the stuff Korea imports from Japan isn't high technology, its basic necessities like steel and plastic. What exactly is this remark about Japan graduating to the high tech component sector? The entire microchip and semiconductor industry involves building high tech components for computers. The same industry where Elpida went bankrupt and caused a ton of grief in Japan.

Japan didn't graduate to the high technology component sector. Their electronics and microchip industry was simply out competed by their Korean rivals and now they rely on selling meager components in order to make a living. Thousands of Japanese have lost their jobs in various tech sectors they once dominated, you don't hear these individuals remarking about how they moved on to more lucrative world of building components roflmao. Ask any businessmen if they would prefer to be a Samsung/Toyota or some unknown component maker that makes a few pennies for every car/smart phone sold.

lol, when I did I say that, lol. Elpida failed because of costs and not adapting to new technologies, it's failure doesn't reflect on Japan's advanced manufacturing lol.

Considering that Elpida was Japans largest microchip maker and was also responsible for the largest corporate failure in Japanese history, i'd say its failure reflects a lot about Japan's "advanced" manufacturing. lol

No, you're in a severe case of not getting it. Japan most definitely did graduate onto advanced manufacturing and have NOT been kicked out by the Koreans.

Tell that to Sony, Panasonic, Elpida, Sharp and other Japanese electronics giants. You live in a fantasy world. Read this

http://www.technobuffalo.com/miscellaneous/japan/japanese-electronics-companies-struggling-to-keep-up/

You don't seem to get it at all. Go live in the real world for a second.

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The Koreans do chip making and semiconductor production today -

The Koreans design faster, smaller, more efficient and cheaper chips. Guess who buys those chips? Various countries do including Japan. Those chips happen to be high tech components. Technology that the Japanese were crushed in.

the Japanese produce the goods and high tech needed for those chips and semiconductors.

Such as? Give me examples.

Did you know that Japan has a huge trade deficit with China of all places? China makes components for various Japanese firms. Why is that? Is it because Japan does not have the technological know how to make them or is it because its simply cheaper to make them in China? Just like how once upon a time, it was cheaper for Korean companies to simply buy Japanese parts rather than build an entire factory from the ground up, hire employees, buy the patent etc etc etc. Of course this is changing and Koreans are now entering the component world in drove.

Speaking of which, most of the Korea-Japan trade deficit stems from things like steel and plastic rather than those high tech products you continuously rant about. Korean companies are less and less reliant on Japanese parts due to higher yen as well as the growth of Korean component makers. In fact the Tsunami has resulted in several big name Japanese companies switching to Korean parts for the long term. Not only because of the Tsunami but also due to the price and quality.

You keep repeating this nonsense about how Japan controls high tech parts needed for manufacturing without providing any evidence. Worst of all is that you assume that this aspect of technology is more important then the actual design and innovation that goes into electronics. If we were discussing engines rather than microchips, then the perfect analogy would be-

"Koreans designed the built the engine to be faster, quieter and more efficient. Japan provided the nuts and bolts that go into the engine because Korea doesn't specialize in such parts"

Sorry to say this but the actual design, innovation and tech comes from the builder, not the component supplier. Just like how Samsung successfully designed a 20 nm chip while Elpida couldn't(due to the lack of know how).

Do you understand yet? And these 'companies' themselves largely didn't graduate onto advanced manufacturing, it was mostly new companies that were created over the last 20 years, due to Japan's R&D spending, that specialise in these areas.

Maybe Toyota should just give up making cars, go bankrupt and graduate into the world of making car parts. No, sorry but YOU don't seem to understand.

I can't help but laugh whenever you remark that Japan has moved upward into the world of manufacturing components. Apple is one of the most profitable companies in the world. It focuses on selling products rather than manufacturing components. Same goes for Samsung and Toyota. If you honestly believe Japan has graduated to the world of component manufacturing, then I've got a bridge to sell you. The correct statement you are looking for is

"Japan has been demoted to the world of manufacturing components."

The individual proft margins are thinner, but there are MORE of these companies which make up for that overall. Someone still doesn't understand.

Give me your sources with numbers, otherwise I call BS.

The profits going into selling products is far greater than selling components. Its basic math. You build a phone, car, computer for only a fraction of what you intend to sell it for. Why do you continue to delude yourself into believing Japanese tech companies graduated into component making?

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CharlieCard

[quote]Japan had a RECORD surplus with Korea in 2010, despite the strong yen, obviously if Japan was not handicapped it would outcompete Korea easily..the proof is in the surplus of 2010 which grew everysingle year.[/quote]

Completely wrong.

The better the Korean economy does, the larger Japans trade surplus is. Why is that? Its because Korea imports steel, minerals and plastics from Japan(close proximity= cheaper). When demand in South Korea outstrips supply, Korea imports raw materials from its neighbors. Korea may be at a deficit with Japan when it imports those raw materials but it converts those materials into ships, electronics and other commodities to be sold. Korea ends up with a trade surplus overall. Just put it this way-

South Korea has a trade deficit with Japan. Japan has a trade deficit with China. China has a trade deficit with South Korea. So on and so forth.

Thats how the economy of the three nations are intertwined.

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Its not that I don't understand, its that your argument contradicts reality. Those components you refer to are not high technology. Designing slick new and fast chips is high technology. Providing car windows isn't. Korea provides chips and yes components to Japan as well. You seem to hold this delusional view that only Japan supplies components rather than vice versa. As Chucky mentioned earlier, 35% of the trade deficit comes from steel alone. Korea imports steel from Japan due to convenience of location and growing demand. When demand outstrips supply, you need to import materials and parts to satisfy growth. Thats the situation Korea is in and Japan sure as hell isn't(poor economy). Most of the stuff Korea imports from Japan isn't high technology, its basic necessities like steel and plastic. What exactly is this remark about Japan graduating to the high tech component sector? The entire microchip and semiconductor industry involves building high tech components for computers. The same industry where Elpida went bankrupt and caused a ton of grief in Japan.

Actually you still don't get it, the Japanese have monopolised the technology the Koreans need to make their chips. This has to keep on being explained to you, because you don't understand. You don't understand that microchips and semiconductors are dependant on higher end technology from other other companies (Japanese companies).

Japan didn't graduate to the high technology component sector. Their electronics and microchip industry was simply out competed by their Korean rivals and now they rely on selling meager components in order to make a living. Thousands of Japanese have lost their jobs in various tech sectors they once dominated, you don't hear these individuals remarking about how they moved on to more lucrative world of building components roflmao. Ask any businessmen if they would prefer to be a Samsung/Toyota or some unknown component maker that makes a few pennies for every car/smart phone sold.

Do you know what producers goods are roflmao. The Japanese do a higher level of manufacturing than simply the production of electronics and microchips - I never said anything about car components roflmao. Ask any businessman yourself. Japan's population already overwhelmingly works in small firms that specialise in high end, niche production.

Considering that Elpida was Japans largest microchip maker and was also responsible for the largest corporate failure in Japanese history, i'd say its failure reflects a lot about Japan's "advanced" manufacturing. lol

Actually Elpida didn't make producer goods, it was not a SME, it employed over 3000 people. Not an advanced manufacturer and again, an exception to Japan's manufacturing industry.

The Koreans design faster, smaller, more efficient and cheaper chips. Guess who buys those chips? Various countries do including Japan. Those chips happen to be high tech components. Technology that the Japanese were crushed in.

And guess who needs the high technology to make the chips in the first place? Oh, it's the Koreans. And who makes that high tech they need - yep, the Japanese.

Did you know that Japan has a huge trade deficit with China of all places? China makes components for various Japanese firms. Why is that? Is it because Japan does not have the technological know how to make them or is it because its simply cheaper to make them in China? Just like how once upon a time, it was cheaper for Korean companies to simply buy Japanese parts rather than build an entire factory from the ground up, hire employees, buy the patent etc etc etc. Of course this is changing and Koreans are now entering the component world in drove.

China had a $50 million trade deficit with Japan in 2010 in capital goods. The Koreans are entering the component world in droves, and yes, they are dominating chip production. But they need the high tech for those chips form Japan. I'll keep repeating because you don't understand.

The trade deficit comes also from high technology, not just steel.

You keep repeating this nonsense about how Japan controls high tech parts needed for manufacturing without providing any evidence. Worst of all is that you assume that this aspect of technology is more important then the actual design and innovation that goes into electronics. If we were discussing engines rather than microchips, then the perfect analogy would be-

"Koreans designed the built the engine to be faster, quieter and more efficient. Japan provided the nuts and bolts that go into the engine because Korea doesn't specialize in such parts"

Here's your evidence.

http://www.digitimes.com/print/a20110322VL203.html

And even if Samsung and Hynix switched to LG Siltron for its wafers, LG Siltron STILL needs the semiconductor grade silicon crystal than only Japan knows how to make. Producer's goods, producer's goods, producer's goods.

Maybe Toyota should just give up making cars, go bankrupt and graduate into the world of making car parts. No, sorry but YOU don't seem to understand.

Don't worry, Toyota's not in trouble and I never advocated for its bankruptcy.

I can't help but laugh whenever you remark that Japan has moved upward into the world of manufacturing components. Apple is one of the most profitable companies in the world. It focuses on selling products rather than manufacturing components. Same goes for Samsung and Toyota. If you honestly believe Japan has graduated to the world of component manufacturing, then I've got a bridge to sell you. The correct statement you are looking for is

"Japan has been demoted to the world of manufacturing components."

No, Japan has GRADUATED onto advanced manufacturing, they make the TECHNOLOGY needed for the COMPONENTS, not just the components themselves, and have numerous chokepoints and strongholds in various areas in the highest levels of the supply chain in different industries. They have diversified and one electronics company gets replaced with many other smaller, but higher end companies specialising in higher technology. It is perfectly possible to have a hugely successful economy and surpluses based on advanced manufacturing, on these producer's goods and capital production, it's what Germany gives credit for its economy today.

'We make the thing that goes in the thing that goes in the thing' - Germany's own explanation for why it is the economic envy of the world today.

The profits going into selling products is far greater than selling components. Its basic math. You build a phone, car, computer for only a fraction of what you intend to sell it for. Why do you continue to delude yourself into believing Japanese tech companies graduated into component making?

Why have you deluded yourself into not thinking they have graduated onto producer's goods. Components (which chips fall under) are reliant on producer's goods! In an advanced manufacturing economy, a few big companies get replaced by many more smaller ones. And like we see from Germany and Japan prior to 2011 (worst year in post-war history), it is possible to have a trade surplus based on producer's and capital goods, the profits on various companies nonwithstanding. Of course a larger company will have more profits, because they're as you've guessed, LARGER, but the more numerous SMEs collectively make up for that. Japan's surpluses grew hugely from 1990 to 2010, a time when it was supposedly allegedly losing its manufacturing base to Korea - 'rotflmao'.

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Of course a larger company will have more profits, because they're as you've guessed, LARGER, but the more numerous SMEs collectively make up for that. Japan's surpluses grew hugely from 1990 to 2010, a time when it was supposedly allegedly losing its manufacturing base to Korea - 'rotflmao'.

The lot of misconception comes from the fact that these SME aren't widely known unless you're involved in the industry.

Toray, Stella-Chemifa, Hitachi Kasei, Atect, Asahi Glass, Sumitomo Metal Mining, DISCO, Minebea, Nidec, Ushio, etc. don't get much headline but these companies have product(s) that are basically monopoly.

Speaking of Apple, an interesting article from Chosunonline back in March of last year.

アップルのiPhone(アイフォーン)はメード・イン・チャイナ、つまり中国製だ。台湾企業のフォックスコンが中国広東省の深セン工場で製造している。iPhone1台の製造原価は179ドル(約1万4492円)ほどだ。しかしその中でフォックスコンの懐に入るのはわずか6.5ドル(約526円)。原価の多くは部品などを供給する日本、ドイツ、韓国、米国などの企業に流れる。中でも日本企業の取り分は60ドル(約4858円)で、iPhoneが売れればそれだけ日本企業の取り分も多くなる。

It states here that even though IPhone is "made in china", the wholesale price is $179 of which the Chinese factory portion is a mere $6.50 while the Japanese companies that supplies the parts/materials has a share of $60. In other words, the more IPhone sales, the more for the Japanese companies.

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Actually you still don't get it, the Japanese have monopolised the technology the Koreans need to make their chips. This has to keep on being explained to you, because you don't understand. You don't understand that microchips and semiconductors are dependant on higher end technology from other other companies (Japanese companies). Do you know what producers goods are roflmao. The Japanese do a higher level of manufacturing than simply the production of electronics and microchips - I never said anything about car components roflmao. Ask any businessman yourself. Japan's population already overwhelmingly works in small firms that specialise in high end, niche production. Actually Elpida didn't make producer goods, it was not a SME, it employed over 3000 people. Not an advanced manufacturer and again, an exception to Japan's manufacturing industry. And guess who needs the high technology to make the chips in the first place? Oh, it's the Koreans. And who makes that high tech they need - yep, the Japanese. Here's your evidence. http://www.digitimes.com/print/a20110322VL203.html

Did you even bother to do some research on the link you provided. The jest of the article was that the earthquake disrupted the supply chains of many Korean tech firms which is true. But this disruption wasn't due to Korea lacking the technology to produce such parts, it was due to demand outstripping supply. The site mentions LCD panels, DRAM, NAND flash, Second battery cell and ODD as areas that has affected Korea. None of those components are monopolized by Japan. Korea is more then capable of producing such parts, in fact they do so very well.

LG is the largest LCD panel maker in the world, samsung is number 2.

http://www.koreaittimes.com/story/6490/global-lcd-makers-knock-doors-chinese-market

Samsung is the largest NAND flash maker in the world. Hynix is number 3 if im not mistaken.

http://www.zdnet.com/blog/asia/samsung-plans-to-build-chip-factory-in-china-amid-booming-smartphone-tablet-sales/404

Samsung is the largest DRAM maker in the world. Hynix is number 2. With Elpida on life support, Japan is practically a non factor in this tech field.

http://www.tomshardware.com/news/samsung-hynix-elpida-q32011-dram,14247.html

Belgiums Umicore is the worlds largest Secondary battery cell(rechrageable batteries) materials maker. Its main production bases and research are in South Korea.

http://www.evwind.es/noticias.php?id_not=7169

Japan does have the worlds largest rechargeable battery company in the world(Nichia) but guess who supplies them with the parts necessary to make such batteries? South Korea does. Speaking of which, Samsung SDI and LG chemical both make their own batteries. Battery technology is not particularly high tech btw.

Finally, the site mentions Japans ODD(aka CD players). All I can say is LOL. CD players are not ultra complicated high technology items. Korean electronics firms make their own CD players but they don't specialize in them due to low profits. Thats why they buy so many from Japan. Cheaper to import then to set up production lines just to make ODDs.

You have to realize that Korea is not able to produce every component it needs on its own due to high demand of Korean products. The world market is huge and demand outstrips the production facilities in Korea. Thats why they import parts. Thats why other countries also import parts, Japan included.

http://viewswire.eiu.com/index.asp?layout=ib3Article&article_id=1758482560&pubtypeid=1112462496&country_id=1590000159&fs=true&rf=0

Why do you continue to hold this delusional view that Japan has graduated to the high tech components field or that Korea doesn't make its own components. Japan didn't graduate. They were beaten and forced to venture elsewhere to make a money. Did you know that Samsung by itself is larger then ten of the largest Japanese electronics companies combined? Thats pretty darn embarrassing if you ask me.

China had a $50 million trade deficit with Japan in 2010 in capital goods. The Koreans are entering the component world in droves, and yes, they are dominating chip production. But they need the high tech for those chips form Japan. I'll keep repeating because you don't understand. The trade deficit comes also from high technology, not just steel.

Lol wrong entirely.

""Japan's shortfall with China was 587.9 billion yen ($7.4 billion), 40 percent of the total trade deficit for January, Japanese finance ministry data showed.""

http://news.yahoo.com/japan-logs-record-trade-deficit-recovery-seen-003314586.html

And even if Samsung and Hynix switched to LG Siltron for its wafers, LG Siltron STILL needs the semiconductor grade silicon crystal than only Japan knows how to make. Producer's goods, producer's goods, producer's goods.

Lol wrong again. Koreas OCI(link below) and Hankook semiconductors both make makes semiconductor grade silicon crystal(polycrystalline silicon), and do so very well.

http://www.solarbuzz.com/industry-news/oci-invests-16-billion-expansion-polysilicon-plant http://www.solarserver.com/solar-magazine/solar-news/current/2011/kw15/hankook-silicon-achieves-3200-mty-polysilicon-production-at-yesou-korea-plant.html

In fact, OCI is the largest producer of polycrystalline silicon in 2012 with 62kt. Where do you get your BS information from? Japan isn't the only country in the world that knows how to make silicon crystals. The US, Germany, Hong Kong, Norway, China, Russia and Qatar all make them.

Don't worry, Toyota's not in trouble and I never advocated for its bankruptcy.

You didn't answer my half hearted question. Why doesn't Toyota simply go bankrupt and graduate in the world of making car parts?

You keep barking about how Japans electronics industry graduated to the world of high tech components, when in reality thousands of Japanese workers have lost their jobs due to inferior tech, bankruptcy and poor business practices in the tech sector. But you live in a delusional bubble world where Japan intentionally moved on lol. So why doesn't that same logic apply to Toyota then? Why doesn't Toyota simply graduate?

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vg866 you didn't really think your reply through very well did you? First of all Japan was forecasted to have a surplus with China in 2011, until the tsunami and earthquake struck..and assuming the yen goes back down to its real value this could happen again.

Not only that you clearly do not understand how important parts manufacturing is. Only the most high tech nation in the world has a monopoly on parts...the US had a monopoly on this in the 50s-70s and now Japan took it over with over 70% of the entire worlds high techn parts being supplied by Japan.

As long as the yen goes back to its fair value, Japanw ill compete just fine. As it is now the rate is the most overvalued in the entire currency exchange market and everysingle export sold from Japan is sold at a loss.

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Readers, you are going around in circles and posting nothing new.

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Did you even bother to do some research on the link you provided. The jest of the article was that the earthquake disrupted the supply chains of many Korean tech firms which is true. But this disruption wasn't due to Korea lacking the technology to produce such parts, it was due to demand outstripping supply. The site mentions LCD panels, DRAM, NAND flash, Second battery cell and ODD as areas that has affected Korea. None of those components are monopolized by Japan. Korea is more then capable of producing such parts, in fact they do so very well.

LG is the largest LCD panel maker in the world, samsung is number 2.

http://www.koreaittimes.com/story/6490/global-lcd-makers-knock-doors-chinese-market

Samsung is the largest NAND flash maker in the world. Hynix is number 3 if im not mistaken.

http://www.zdnet.com/blog/asia/samsung-plans-to-build-chip-factory-in-china-amid-booming-smartphone-tablet-sales/404

Samsung is the largest DRAM maker in the world. Hynix is number 2. With Elpida on life support, Japan is practically a non factor in this tech field.

http://www.tomshardware.com/news/samsung-hynix-elpida-q32011-dram,14247.html

Belgiums Umicore is the worlds largest Secondary battery cell(rechrageable batteries) materials maker. Its main production bases and research are in South Korea.

http://www.evwind.es/noticias.php?id_not=7169

Finally, the site mentions Japans ODD(aka CD players). All I can say is LOL. CD players are not ultra complicated high technology items. Korean electronics firms make their own CD players but they don't specialize in them due to low profits. Thats why they buy so many from Japan. Cheaper to import then to set up production lines just to make ODDs.

You have to realize that Korea is not able to produce every component it needs on its own due to high demand of Korean products. The world market is huge and demand outstrips the production facilities in Korea. Thats why they import parts. Thats why other countries also import parts, Japan included.

http://viewswire.eiu.com/index.asp?layout=ib3Article&articleid=1758482560&pubtypeid=1112462496&countryid=1590000159&fs=true&rf=0

LMAO, you STILL don't get it, nobody is saying anything about Korea's dominance in those fields. Read the article again, and this time properly. The article didn't dispute LG making LCD screens, or Samsung making NAND. It outlined the dependance LG and Samsung have in the more skill and capital intensive producer goods Japan has monopolised to keep making their LCD and NAND. You really don't understand - 'roflmao' as you love to say. Please look up what producer's goods are. And the battery and CD examples you've provided are irrelevant. South Korea remains completely dependant on Japan's high tech.

Why do you continue to hold this delusional view that Japan has graduated to the high tech components field or that Korea doesn't make its own components. Japan didn't graduate. They were beaten and forced to venture elsewhere to make a money. Did you know that Samsung by itself is larger then ten of the largest Japanese electronics companies combined? Thats pretty darn embarrassing if you ask me.

A delusional view? No, facts. Do you NOT get it yet? Japan were not beaten, over the last 20 years, they've moved into advanced manufacturing and dominate larges swarthes of the field, a dominance they DIDN'T have in the 80s. Korea makes chips, semiconductors, and electronics. Japan makes the technology those companies need to make their chips and electronics. And no Samsung being bigger than 10 of the largest Japanese electronic companies combined is not embarrassing, considering it's a chaebol and makes up 20% of the Korean economy. Japan's economy is MUCH more diversified, hence why they have 10 companies, where Korea puts all its eggs in one basket and has one huge conglomerate instead.

Lol wrong entirely.

""Japan's shortfall with China was 587.9 billion yen ($7.4 billion), 40 percent of the total trade deficit for January, Japanese finance ministry data showed.""

http://news.yahoo.com/japan-logs-record-trade-deficit-recovery-seen-003314586.html

Lol, right entirely. Look at the year I posted, 2010. 2011 was the worst year in Japan's postwar history, marked as it was by nuclear diaster, tsunami, earthquake, a soaring yen, floods in Thailand, nearly all the nuclear reactors being shut down, increasing Japan's energy dependance.

Lol wrong again. Koreas OCI(link below) and Hankook semiconductors both make makes semiconductor grade silicon crystal(polycrystalline silicon), and do so very well.

http://www.solarbuzz.com/industry-news/oci-invests-16-billion-expansion-polysilicon-plant http://www.solarserver.com/solar-magazine/solar-news/current/2011/kw15/hankook-silicon-achieves-3200-mty-polysilicon-production-at-yesou-korea-plant.html

In fact, OCI is the largest producer of polycrystalline silicon in 2012 with 62kt. Where do you get your BS information from? Japan isn't the only country in the world that knows how to make silicon crystals. The US, Germany, Hong Kong, Norway, China, Russia and Qatar all make them.

BS information? Japan's Shin-Etsu and Sumco companies are the only ones in the world who make the semiconductor grade silicon ingots that are required for the semiconductor silicon crystal. All the other companies and countries you listed need these ingots in the first place. I already explained this. Clearly you didn't read the rest of the posts, which shows you just came into this thread to pursue your own agenda, what you accused me of doing.

You didn't answer my half hearted question. Why doesn't Toyota simply go bankrupt and graduate in the world of making car parts?

Um, because Toyota makes cars not components? I never defended Elpida in this thread, they were undone by costs and other factors, but they made chips which IS not advanced manufacturing. Advanced manufacturing is making the goods required for those chips. Elpida is an exception in Japan's industry, SMEs make up 99% of Japanese companies and Elpida was not an SME.

You keep barking about how Japans electronics industry graduated to the world of high tech components, when in reality thousands of Japanese workers have lost their jobs due to inferior tech, bankruptcy and poor business practices in the tech sector. But you live in a delusional bubble world where Japan intentionally moved on lol. So why doesn't that same logic apply to Toyota then? Why doesn't Toyota simply graduate?

You keep barking on how they haven't. Again, I didn't defend Elpida, and yes, Japan did intentionally move on lol. Advanced manufacturing stands at the apex and was deliberately pursued by Japan starting in the late 80s, and look at them now. Dominance and monopolies. And, yet again, Toyota makes cars.

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You are still going around in circles. From here on, posts that are repetitive will be removed.

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