> Profitability in the highly commodified DRAM business
> in which Japanese companies are still concentrated has been quite weak (and
> Taiwan is set to bring on massive new capacity in the next few years):
> Hitachi and NEC were posting massive losses last year (remember the WSJ
> 6/10/99 article I downloaded or the Mowery analysis from California
> Management Review Fall 1998 excerpts from which I dowloaded as well?) It's
> not semiconductors or growth in the abstract that matters. It's
> profitability.
Massive losses one year, followed by massive profits this year. The structure of East Asia's tech biz is changing pretty fast, though; they're not just DRAM vendors licensing US designs anymore, but are getting into MCUs, telecoms, etc. The only real monopolist which fits your description is Intel, which had the right product mix at the right time to ride the desktop PC boom; but AMD's Athlon and Via's x86 chips are beginning to dent Intel's margins significantly. It looks like Nokia is going to do someting similar in cellphones; it's an open question who's going to strike it rich in PC appliances (my guess is, a South Korean firm, since Taiwan specializes in PC peripherals).
The other issue which needs to be mentioned here is that East Asia is piling humongous resources into R & D and scientific research. Japan's science spending is now something like 2.9% of GDP, the highest in the world; the US spends maybe 2.5%, but at least a fifth of this is military-related.
> ps you have not responded either to Robert Eisner's deflationary critique
> of fears of the US' debtor status.
Eh? What's there to fear? We're 2 trillion euros in hock to economies which have lower interest rates than we do. If their interest rates were higher, *then* we'd be in a world of hurt, but why would the EU and East Asia want to slash their own wrists? Not that government by central bankers is superior than governance by Bubble-rentiers, of course.
-- Dennis