Analyze This: Electronics winners & losers in 2012

Here’s a look back at my 10 biggest trends of 2012. Though the calendar has just turned the page, I believe my list will drive the global electronics industry in 2013. What's your take? Please read the article and enter your take in the comments box at the bottom.

1. Japan’s Decline

I met recently with Brian Toohey, head of the Semiconductor Industry Association. Among other things, we discussed SIA’s history and how it was formed 30 years ago in response to the competitive threat posed at the time by Japan’s semiconductor industry.  Recall that Intel had recently exited the memory business (in hindsight, a brilliant move) and other chip makers like Siemens and Texas Instruments were wishing they had got out at the same time.

Fast forward 30 years and the Japanese semiconductor industry finds itself in dire straits. EE Times international correspondent Junko Yoshida has reported about the many iconic Japanese electronics that are consolidating to survive.  Sharp is perhaps the weakest and but Fujitsu and Renesas also are struggling. 

What happened?  My analysis is that making huge bets on commodity businesses is inherently risky, and there are no more risky businesses than memory and displays. Hence, “Japan Inc.” put itself in harm’s way and underestimated the market power of Samsung and Micron.

Thirty years ago, Japanese companies were respected for their innovation and consumer marketing prowess (think Sony, Canon and Panasonic) but something happened in the 1990’s that stifled innovation and slowly asphyxiated Japan Inc.  Was it simply due to the Innovators Dilemma working on a national scale?  Or was the advantage provided by manufacturing excellence simply not sustainable?  This is fodder for books, conferences, pundits and policy makers and would love to hear your views.

Related stories:

Yoshida in Japan: Sharp tripped by engineering ego

Yoshida in China: Time for Japan to exit TV market
Next: 2. The Chinese are (still) coming