【CEO Column】Without Japan, Silicon Valley as we know it today would not exist
- Daichi Mitsuzawa
- 19 hours ago
- 6 min read
San Francisco Bay Area accounts for roughly 5% of U.S. GDP*1. At the heart of the Bay Area sits Silicon Valley. True to its name, Silicon Valley first flourished in the 1950s as a hub of U.S. semiconductor production. Later, as internet companies began to emerge there in rapid succession through the 1980s, the region consolidated its status as the world’s leading technology epicenter.
Yet the rise of the U.S. semiconductor industry that built Silicon Valley was not achieved by the United States alone. Japan’s electronics and semiconductor industries played an indispensable structural role. This article analyzes that role—grounded in historical facts—through three lenses:
Market indispensability: Japan’s consumer electronics industry created vast semiconductor demand that supported the growth of the U.S. semiconductor industry.
Institutional indispensability: The rise of Japan’s semiconductor capabilities spurred a shift in U.S. industrial policy (including the establishment of SEMATECH and the Japan–U.S. Semiconductor Agreement).
Technological indispensability: Toshiba’s invention of NAND flash memory became a foundational technology enabling the smartphone and cloud era.
The central argument is that, from the Cold War through the post–Cold War period, Japan was structurally indispensable—both as a partner and as a competitor—in the reconfiguration of U.S. technological hegemony and industrial competitiveness.
The Co-evolution of Japanese Consumer Electronics and the U.S. Semiconductor Industry/Silicon Valley — In 1970, nearly half of U.S. IC exports went to Japan
After World War II, Japanese consumer electronics manufacturers (including Sony, Sharp, and Seiko) expanded rapidly in global markets. As a result, demand for semiconductor components surged. Initially dependent on government procurement in defense and space, U.S. semiconductor firms sought new opportunities in civilian markets—and took notice of Japan’s robust demand.
In 1953, Tokyo Tsushin Kogyo (Sony’s predecessor) obtained a license to use transistor technology from Western Electric (the parent company of Bell Labs)*2. As if responding to U.S. expectations, Japanese companies then produced a stream of innovative products—transistor radios, calculators, portable music players (Walkman), and more—creating broad consumer demand for semiconductors. This, in turn, accelerated commercialization and scaled mass production for U.S. semiconductor firms.
For example, Intel’s first microprocessor, the 4004, was born in 1971 through joint development with the Japanese calculator manufacturer Busicom—an emblematic case in which Japanese demand directly catalyzed Silicon Valley innovation*3. Likewise, Sharp’s electronic desktop calculators and Seiko’s pioneering electronic wristwatch were commercialized using and co-developing LSI chips supplied by U.S. firms (Rockwell and Intersil)*4. In fact, by 1970 Japan accounted for about one-fifth (18.3%) of total U.S. transistor exports—and nearly half (47.9%) of U.S. integrated circuit exports.
In short, beyond government demand in defense and space or venture capital financing, it was Japan’s vast consumer-electronics-driven semiconductor demand and market that provided critical support to early U.S. semiconductor manufacturers—becoming a structural factor that underpinned Silicon Valley’s growth. A division of labor persisted into the 1980s: the United States led in advanced semiconductor R&D and production, while Japan integrated that technology into product design and large-scale manufacturing. This interdependence was supported not only by economic rationality but also by the political alliance of the Cold War era.
The Rise of Japanese Semiconductors and the Shift in U.S. Industrial Policy — Japan’s DRAM forced the U.S. to create “exceptions” to its market-first approach
From the late 1970s through the 1980s, Japanese semiconductor companies (NEC, Toshiba, Hitachi, Fujitsu, among others) rose to world-class leadership in technology and market share, particularly in memory—becoming a major competitive threat to the U.S. semiconductor industry. In 1981, Japanese firms captured the leading global share in the 64K DRAM market*4, and in optical lithography equipment Nikon also came to dominate global markets*6, enabling Japanese players to establish advantage across the value chain—from upstream to downstream.
In response to this “Japanese semiconductor surge,” the United States mounted a counteroffensive across both industry and government. On the industry side, the Semiconductor Industry Association (SIA) was formed in 1977 and began pressing the U.S. government to pursue trade negotiations aimed at opening Japan’s market*7. Politically, during the Reagan administration, semiconductors were increasingly framed as a national-security-critical industrial base, and policies aimed at countering Japan’s “unfair trade” practices were rolled out one after another*8. In 1986, the two governments concluded the Japan–U.S. Semiconductor Agreement, establishing measures to regulate Japanese semiconductor exports to the United States and to expand acceptance of foreign semiconductors within the Japanese domestic market*9. President Reagan characterized the agreement as a landmark deal that would make both markets “freer and fairer,” strengthen U.S. semiconductor firms’ competitiveness in Japan, and prevent unfair dumping by Japanese companies*10.
In practice, Japan accepted voluntary restraints on DRAM exports and measures to expand foreign firms’ semiconductor market share in Japan, while the United States temporarily suspended ongoing anti-dumping investigations*11. The U.S. also launched domestic industry-strengthening measures: in 1987 it established SEMATECH, a semiconductor manufacturing technology research consortium. Fourteen major U.S. semiconductor firms initially participated, collaborating to establish 64M DRAM manufacturing technology and standardize next-generation semiconductor manufacturing equipment, among other goals*12. Through this public–private effort, U.S. firms improved manufacturing technology and yields, and by 1993 U.S. semiconductor production surpassed Japan’s, returning the United States to the world’s No. 1 position. The underlying driver is clear: Japan’s rise created an acute sense of crisis that led the United States—traditionally committed to “private-sector leadership”—to adopt unusually interventionist, government-backed industrial policies.
In other words, the presence of Japan as a formidable competitor compelled the United States to reorganize its strategy for sustaining technological hegemony.
Toshiba’s Invention of NAND Flash Memory and the Foundation of the Information Revolution — A 1987 Toshiba invention that powers your smartphone
Japan’s influence in Silicon Valley’s formative years was not limited to creating demand or imposing competitive pressure. Japanese companies also contributed to foundational technological innovation itself. The most striking example is Toshiba’s invention of NAND flash memory.
In 1987, a Toshiba team led by Fujio Masuoka developed and presented the world’s first NAND flash memory. NAND flash is non-volatile memory that retains data without power—an innovative semiconductor device that enabled high-capacity, high-speed storage. This breakthrough made compact, large-capacity storage possible, and flash memory later became a key component across a wide range of fields: from consumer devices such as mobile phones, smartphones, digital cameras, and portable music players, to data centers in the cloud era. In reality, neither smartphones nor SSD-based cloud storage could have emerged without the scaling and cost reduction of NAND flash—making this Toshiba-born technology a cornerstone of modern information infrastructure*13.
In the 1980s, Japanese semiconductor firms largely prioritized DRAM, and flash memory development was often treated as peripheral. Even so, Toshiba pursued the work with foresight, advanced R&D, and helped create a market*14. U.S. companies, including Intel, later followed suit in flash memory development as well*13.
NAND flash memory thus stands as a historically significant case in which a Japan-originated invention became a game-changing technology in a domain long dominated by U.S. firms—laying critical groundwork for subsequent global innovation.
Conclusion
As the foregoing analysis shows, Japan was indispensable to the rise of U.S. semiconductor technological leadership and the formation—and re-formation—of industrial competitiveness during Silicon Valley’s formative era (1950s–1990s). Japan’s electronics industry generated massive semiconductor demand, structurally supporting U.S. firms’ technological development and market expansion. At the same time, the rapid advance of Japanese semiconductor firms pushed the United States toward more proactive industrial-policy intervention, becoming a driving force behind competitive-strengthening measures such as the Japan–U.S. Semiconductor Agreement and SEMATECH. Moreover, Japanese companies themselves contributed to semiconductor innovation, with NAND flash memory as a prime example of a technology that later underpinned the digital society.
U.S. technological superiority and Silicon Valley’s ascent were not achievements of the United States alone. They were forged through interaction with Japan—an ally and a competitor—often at significant cost to Japan’s own semiconductor industry. This historical perspective offers meaningful insights for understanding today’s global technology competition.
(Editor: Daichi Mitsuzawa, CEO of Jelper Club Inc.)
Notes・Sources
"Gross Domestic Product by County and Metropolitan Area, 2023" (Bureau of Economic Analysis): https://www.bea.gov/sites/default/files/2024-12/lagdp1224.pdf : In the BEA “GDP by County” table (Real GDP / chained 2017 dollars), total U.S. real GDP for 2023 is 22,671,096,000 (thousand dollars). If we define the “San Francisco Bay Area” as the commonly referenced nine counties (Alameda / Contra Costa / Marin / Napa / San Francisco / San Mateo / Santa Clara / Solano / Sonoma), the sum of their 2023 real GDP (by county) is 1,145,204,827 (thousand dollars). Therefore, 1,145,204,827 ÷ 22,671,096,000 = 0.0505… ≒ 5.1%.
「第4章 初めての渡米＜トランジスタの自社生産＞」（Sony）：https://www.sony.com/ja/SonyInfo/CorporateInfo/History/SonyHistory/1-04.html
「マイクロプロセッサ 4004 (インテル)」（ビジコン）：http://www.dentaku-museum.com/hc/computer/intel4004/intel4004.html
「業界動向1960年代」（SHMJ）：https://www.shmj.or.jp/industry-trends/era1960.html#:~:text=1969%E5%B9%B4%20%E3%82%B7%E3%83%A3%E3%83%BC%E3%83%97%E3%81%8C%E9%9B%BB%E5%8D%93QT
"Report to the President on Worker Investigations No. TEA-W-82 through 88 Under Section 301(0(2) of the Trade Expansion Act of 1962" (UNITED STATES TARIFF COMMISSION: https://www.usitc.gov/publications/tea/pub395.pdf
"Increasing Complexity and Limits of Organization in the Microlithography Industry: Implications for Japanese Science-based Industries" (RIETI Discussion Paper Series 05-E-007): https://www.cirje.e.u-tokyo.ac.jp/research/workshops/micro/documents/chuma.pdf
「日本製半導体の急速なシェアの拡大に対し、米国半導体メーカの危機感増大」（SHMJ）：https://www.shmj.or.jp/museum2010/exhibi080.htm
"The Tunnel at the End of the Light: The Future of the U.S. Semiconductor Industry" (National Academy of Sciences Arizona State University): https://issues.org/van_atta/#:~:text=In%201987%2C%20a%20Defense%20Science,limited%20view%20of%20the%20world.
「業界動向1980年代」（SHMJ）：https://www.shmj.or.jp/industry-trends/era1980.html
"Statement on the Japan-United States Semiconductor Trade Agreement" (Ronald Reagan Presidential Library & Museum): https://www.reaganlibrary.gov/archives/speech/statement-japan-united-states-semiconductor-trade-agreement#:~:text=I%20a%20m%20announcing%20today,States%20and%20in%20third%20countries
「日米政府間での半導体問題協議が開始され、1986年9月「日米半導体協定締結」」（SHMJ）：https://www.shmj.or.jp/museum2010/exhibi074.htm
「米国SEMATECH（半導体共同開発機構）設立」（SHMJ）：https://www.shmj.or.jp/museum2010/exhibi067.htm
「技術開発ヒストリー」（キオクシア株式会社）：https://www.kioxia.com/ja-jp/rd/technology/history.html#:~:text=NAND%E5%9E%8B%E3%83%95%E3%83%A9%E3%83%83%E3%82%B7%E3%83%A5%E3%83%A1%E3%83%A2%E3%83%AA%E3%81%AE%E9%BB%8E%E6%98%8E%E6%9C%9F ; 「日本の「忘れ去られた英雄」 フラッシュメモリを開発した男、舛岡富士雄」（Forbes）：https://forbesjapan.com/articles/detail/8112