Looking Back From 2026

    Later, Japan Inc. took Sony’s advice and created a software platform it was confident would win the race to mobile computing. The I-mode service was a hit in Japan’s Akihabara electronics shops where scores of Japan-made flip phones (like the one below) used it on their tiny screens.

At EE Times, we saw I-mode and the Japan giants behind it as a viable player, one of many contenders – until the Apple iPhone arrived and Japan had again lost the race to a next-big thing.

What went wrong?

“By 2000, Japan was so confident of itself it thought it would take over the electronics world,” Junko said in a recent phone interview from Paris. “It lost the bigger picture.” 

Essentially, Japan Inc. forgot the lesson of its early success – focus on serving big international export markets. Instead, it got distracted by the local tech fashions that sprouted up in its small domestic market, styles that consumers in the rest of the world found uninteresting, even inscrutable.

The results were bad for its system and semiconductor companies alike. Slowly, they consolidated, cut back and crumbled.

For example, Junko noted, Japan chip maker Renesas was delighted its SH-brand processors got designed into many of the I-mode phones. But focusing on that local market, it missed opportunities for sales to the first iPhone and Android handsets, and once someone else had the chip socket, the door was effectively closed.

“Renesas became Japan’s golden bird in a glass cage -- it couldn’t get out,” she said.

“Panasonic,” one of Japan’s most popular brands in the US, “ended its TV business a few weeks ago,” Junko added. “TV was the last bastion Japan’s consumer giants tried to protect, and now it’s gone.”

Meanwhile, another manufacturing juggernaut rose up less than a thousand miles away. South Korea’s Samsung studied Japan’s giants closely. Some of its execs welcomed Dave Lammers and his many anecdotes when he would pass through on reporting trips.

Slowly and with strong government support through market ups and downs, Samsung learned the art of making chips, displays and systems in high volume with good quality at relatively low costs. It won sales and brand recognition. And like Japan it got accused of dumping products in export markets to win sales.

“We never understood the power of Korea manufacturing,” Junko said. “They had the drive Japan lost, and Korea is such a small county, they had to export.”

 

It’s All About Getting Big, Fast

In a separate call, our former boss and mentor, Richard Wallace, agreed.

“Japan’s not at the cutting edge of anything anymore -- AI, hyperscale data centers, anything,” he said. “It happened in the US, too, where we had lots of TV and discrete semiconductor and vacuum-tube plants once.”

In Wallace’s view, digital consumer electronics drove the change because it was all about super-high-volume markets. “Electronics was built on scalability; it determines everything.

“We went from people making a thousand pieces to hundreds of millions of pieces. That flattened the market for everyone, making it commoditized, so we shipped manufacturing to China and southeast Asia,” he added.

“Now, were driving hyperscaling to whole new levels for a product that doesn’t exist yet,” he said, pointing to the build out of massive data centers for AI.

It was always the case in the chip industry. Smart engineers (including the alpha readers of EE Times) get a glimpse of the trend early and convince business managers to invest ahead of the next big shift.

“I’m waiting for the Visicalc moment of AI,” Richard said, alluding to the first spreadsheet that became a kind of killer app for PCs much as Uber and YouTube made 4G smartphones a must have.

I’ll weigh in more on AI when I get to my time at NVIDIA, but first I have more people and events from my EE Times days I want to write about, including three colorful characters in consumer electronics.

Next: A Host for the Digital Media Party