Industrial Location in Japan with Special Reference to the Semiconductor Industry

Abstract

Semiconductor manufacturing is one of the most successful of the high-technology industries of Japan?industries which have registered exceptionally rapid growth rates during the last fifteen years. It has often been assumed that high-technology industries tend to choose provincial and peripheral locations and until recently, the evidence has shown that Japanese semiconductor manufacturers have indeed opted for locations in outer regions of the country. For various reasons to do with transport and communications, land availability, local government policy and labour supply, the southernmost island of Kyushu has emerged as a major regional concentration of memory chip assembly. But, research and development in the industry has always remained firmly centred in the capital region and current trends in automation and in production generally, seem to indicate that locations in the metropolitan prefectures will become more attractive from the viewpoint of firms seeking new sites for factory development. Meanwhile, changes in the yen-dollar exchange rate, together with pressures arising from trade friction between Japan and the United States, are conspiring to persuade many of Japan's semiconductor manufacturers to give priority to the expansion of production at locations overseas. SINCE THE MID-1970s, a significant change has been underway in the structure of Japan's manufacturing industry. During the 1960s, a period distinguished in Japan by very high rates of economic growth, the leading sectors of manufacturing, with the exception perhaps of the shipbuilding industry, belonged to two broad categories: durable consumer goods industries most of which were based on assembly line processes (motor vehicles, electrical goods such as television receivers, radios and domestic electrical appliances) and capital goods industries directly reliant on imported raw materials and fuels (iron and steel, oil refining, petrochemicals). The former of these categories has remained important?output of passenger cars, for example, rose from 5.3 million units in 1970 to 11.5 million in 1985, and the many and varied trades subsumed by Japanese statistics gatherers under the heading 'electrical machinery' have exhibited rapid expansion throughout the 1970s and early 1980s. By contrast, heavy and chemical industries, including shipbuilding, have either stagnated or contracted during the last fifteen years. Japan remains a major world producer of steel and ships, but in the context of depressed world demand for their products, both of these industries have been burdened by chronic problems of overcapacity. Oil refining and petrochemicals fell victim to the oil crises of 1973 and 1978-79, and have long since ceased to rank among Japan's growth industries. Perhaps the most striking feature of Japan's industrial structure since 1975 has been the emergence and rapid growth of a third major category of manufacturing: that of the high-technology industries. From modest beginnings about ten years ago, Japan has become a major producer, and a major source of technological innovation 'in a wide range of new knowledge-intensive industries, including micro-electronics, optical fibres, amorphous metals, new materials (such as fine industrial ceramics) and mechatronics?a term which refers to the fusion of mechanical and eleclrical