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Japan’s Semiconductor Malaise… & Sumo

HAKONE, Japan — Last Saturday, I was the unlikeliest participant at the VeriSilicon Japanese Semiconductor Industry Executive Forum, where VeriSilicon CEO Wayne Dai assembled a team of chip industry veterans, analysts, academics, and journalists (including my wife, Hotlips), to discuss the near-collapse of the semiconductor industry in Japan.

While the guys (and Hotlips) lamented the death of DRAMs in Japan, Toshiba’s defeat by Qualcomm in smartphone chips, and other high-tech esoterica, I kept thinking about sumo.

I know a little about semiconductors. I know a lot about sumo, enough to have written the book on the subject — SUMO: A Thinking Fan’s Guide to Japan’s National Sport (Tuttle, 2010). Like the chip industry, sumo is withering in a country where it was once dominant. In a way, the sumo crisis is of greater import. Semiconductors, after all, will go on being made, somewhere (probably China). But sumo, without Japan and the unique culture that nurtured it for centuries, will disappear, as surely as, elsewhere, the dodo bird and the Playtex living girdle have become extinct.

The insight that came to me at Wayne Dai’s confab in Hakone was that many of the same problems are killing both semiconductor manufacture and sumo wrestling in Japan. Above all, both activities are plagued by a surfeit of foreigners, horning in where the natives once ruled.

Needs both TLC and Q/C

The quality of traditional sumo in Japan has fallen in recent years,  echoing some complaints about the semiconductor memory business.

The quality of traditional sumo in Japan has fallen in recent years,
echoing some complaints about the semiconductor memory business.

Too much quality?
One of the speakers, Takashi Yunogami of the Fine Process Institute, pointed out that Korea bypassed Japan in production of dynamic random access memory (DRAM) chips years ago, because Japan kept making DRAMs with “excessive technology and excessive quality.”

This assertion raised an outcry from Marco Landi, a VeriSilicon board member and a former executive at Apple and Texas Instruments. Landi found unbelievable the contention that the Japanese DRAM business was “killed by too much quality.” But Yunogami was right. While Japan continued making the best quality chip — a DRAM that might last a decade or more — Korean rival Samsung understood that consumer electronic products like PCs were becoming obsolete and being replaced with new models in five years or less. In a chip market where obsolescence follows swiftly on the heels of Moore’s Law, Japan’s insistence on maximum performance has been the kiss of the spider woman.

Wrestling with similar problems
I’ve been watching the same slow-motion disaster unfold in the venerable sport of sumo — except that a similar Japanese refusal to compromise, by the reactionary geezers of the Japan Sumo Association, has resulted in a catastrophic decline in the quality of the product.

Sumo, nowadays, sucks.

For more than seven years, the champions of Japan’s national sport have not been Japanese. They are Third World refugees from Estonia, Bulgaria, Tonga, Mongolia, and other hungry countries. Promising Japanese athletes nowadays look at the miserable living conditions and primitive training practices in sumo, a regimen of forced obesity and indentured servitude — traditions the Sumo Association has refused to change — and they recoil. Instead, they choose their athletic careers from a cornucopia of sports — rugby, soccer, baseball, cycling, swimming, skating, skiing, gymnastics, basketball, American football, even boxing and professional wrestling. Any sport but sumo.

The protectors of sumo’s feudal traditions still sign up kids to join the sumobeya and strap on the mawashi. But these kids are the bottom of the Japanese barrel. Most recruits are fat-boy junior high school dropouts from the deep inaka (boondocks), uncoordinated slobs who mostly end up not as gladiators battling for the yusho on the great dohyo on Tokyo, but as unpaid flunkies who wait on the grand champions from Mongolia.

Pinned by success
The clear and immediate danger to sumo’s future, of course, is that the standard of living in Mongolia is getting better. As it does, that pipeline will dry up, too.

The Japanese semiconductor industry can recover from its years of stagnation and mismanagement. Japan’s electronics companies retain a wealth of underemployed engineers now languishing in companies with top-heavy management and rigid seniority systems. Japan remains one of the best-educated countries on earth. The raw material of a recovery is here.

Sumo also harbors the seeds of revival. It can modernize without appearing to change at all. It remains one of the most elegant sports in the world, a seriocomic pageant of sights and sounds, silk and sand, costume drama, and sudden violence that cannot be credibly duplicated outside of Japan’s handful of sumo arenas. Sumo is truly unique, and, externally, it is changeless, beautiful, and perfect.

But, like the semiconductor industry, sumo is bleeding internally. My favorite sport has been wounded, perhaps mortally, by the negligence of a calcified hierarchy of geriatric shut-ins who are going to need an army of really persistent weathermen to tell them which way — in the 21st century — the wind is blowing.

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11 comments on “Japan’s Semiconductor Malaise… & Sumo

  1. Mr. Roques
    April 24, 2013

    I understand your passion for sumo wrestling but I think it's far fetched to say it's a greater crisis than the semiconductor one. Going back to what they discussed, I think that's part of the problem. Too much quality… Prices have to be higher than competitors.

  2. Lavender
    April 24, 2013

    It is very strange, isn't it? Quality causes crisis. 

  3. Houngbo_Hospice
    April 25, 2013

    @Mr. Roques,

    I think, Japan manufacturers are mostly suffering from the global economic crisis not because of the good quality of the good quality of their produtcs. Many consumers can no longer afford costly products, but this doesn't mean that they want to buy poor quality products.

  4. FLYINGSCOT
    April 25, 2013

    Sumo will go the way of caber tossing in Scotland and that is limited participation by raving loonies and entrepreneurs who perfrom for the tourists 😉 

  5. kilamna
    April 25, 2013

    Some years ago (2005) on an overseas Exec Business Education program I was teaching, I ran into a young Japanese (woman) professor who was studying the role of Iraq, Iran, Palestine, etc mothers in the 'development' of 'suicide bomber' children.  We talked privately over dinner, among other topics we discussed the causes of the change and decline of Japan's economy.  She broke down with a 'you Americans have destroyed my country again'. Now, I know that many others say that the US is the cause of problems in the world, but I didnt expect it from an educated Japanese.  The point was that by 'falling' for American management practices, short-term (stock market driven) management consultants the well established had lost their way.  

    I was aware then of several Japanese semiconductor companies (NEC Hitachi Fujitsu Mitsubishi) who had been blinded by the soaring valuations on the dotcom driven stock market. They wanted to 'go public' and 'rakein lots of money'.  They hired investment banks. Brand consultants. Manageent consultants. And indeed lost their way to short-term US-view corporatism.  There were first-ever layoffs. Factory shutdowns.Divestitures. Staff that out of a long-term and cultural loyalty to the 'company' saw the blood around them; those who used to work 20-hour days and travelled away from home for weeks on end, were suddenly 'numbers only'. Loyalty and productivity suffered. Mergers took place between companies that had very divergent cultures. (Even in the 'best of times' it is rare that a merger results in 'value add' for the business; though it does for the consultants and investment banks.)  These mergers were guaranteed to fail. And fail they did.

    So: The malaise has little to do with sumo, and much to do with management losing their way. It has little to do with 'too much quality', and a lot to do with trying to adopt a culture that is not natural to you. 

    It is sad that municipalities all over the world are trying to 'create' their own Silicon xxxx (valley, alley, wadi, etc). That will not happen; the sovereign wealth will be wasted on expensive consultants and advisors who can write all manner of proposals and business plans. But the base doesnt exist there. Silicon Valley (the original one in California) happened over many years, because of the confluence of numerous factors in place and time, factors which will be difficult to replicate in any short order.

  6. David Benjamin
    April 26, 2013

    Ah, well. No sports fans here…

     

  7. HM
    April 27, 2013

    Interesting comparison. Have seen some of the teams working for Japanese customers, the team members used to work round the clock. The Japanese counterparts used to do so much micromanagement that sometimes people feel why do they ourtsource it. 

  8. Taimoor Zubar
    April 29, 2013

    Too much quality… Prices have to be higher than competitors.”

    @Mr. Roques: I don't think the Japanese philosophy was just to increase the quality. I think the moto was improving quality and cutting costs at the same time through elimination of waste. All the big Japanese firms including Toyota seemed to have adopted that.

  9. Taimoor Zubar
    April 29, 2013

    @HM: I've studied the Japanese production methods in detail and have also read cases on how some of the Japanese companies were able to transform themselves to improve quality and reduce cost. The objective of these was to work smarter rather than work harder. Most of these companies did not have long work hours. They simply tried to restructure the tasks and process flows to make things more efficient at the same time incorporating quality into the process itself.

  10. HM
    April 30, 2013

    yes of course japanese production methods must be great thats why they produce world class products.

  11. Houngbo_Hospice
    April 30, 2013

    @HM,

    As a matter of fact there is a reason why Japan is the 3rd largest economy in the world as of 2012. I had been in the 2nd largest for a while before it was eventually replaced by China. Japan has a strong manufacturing indistry, but it mostly relies on foreign markets to sell its produtcs.

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