Facing the worst year in its members' history, the semiconductor industry's trade group has been playing political hardball.
The Semiconductor Industry Association has filed trade actions accusing Japanese companies of predatory pricing practices that have all but ruined independent U.S. manufacturers in the multibillion-dollar memory chip market.
"This is a matter of survival," declared Advanced Micro Devices Inc. Chairman Jerry Sanders, one of the association's most outspoken leaders in the struggle against the Japanese.
Yet some of the association's biggest and most politically influential members -- including International Business Machines Corp. and Hewlett-Packard Co. -- have chosen to remain silent.
"We've tried to take a step back from it all," said a spokesman for Hewlett-Packard, the $6-billion-a-year computer and electronics equipment manufacturer and an SIA member. "We have not supported the SIA complaint . . . we are definitely concerned about remedial-type actions that could harm users."
The heart of the conflict is that many SIA members -- most notably IBM, Digital Equipment Corp. and Hewlett-Packard -- not only make the silicon chips for their own use, but buy them from the Japanese as well.
They fear that punitive results of a successful trade complaint -- levies, fines or tariffs -- could dramatically raise the cost of the Japanese chips they purchase and use in their computers and electronics.
That, in turn, could boost prices of the U.S. high-tech goods competing with the Japanese, the Pacific Rim countries and European companies in the global marketplace, placing them at a competitive disadvantage.
By contrast, companies such as Advanced Micro Devices and Intel Corp. are primarily manufacturers of the chips and have borne the brunt of the competitive onslaught and industry slump.
"There are major conflicts between users and manufacturers," said George Scalise, the AMD executive for government relations, "Hewlett-Packard, IBM and Digital Equipment Corp. are worldwide competitors. The cost of their semiconductors is a matter of concern to them. If we come up with a remedy higher than their international competitors, then we have a problem."
Consequently, SIA members who could be powerful supporters of the SIA positions have cultivated a low profile on the association's assorted trade complaints.
"We are neutral" on those issues because we are not affected and have no reason to take an advocacy position," said a spokeswoman for IBM, the world's largest computer company.
However, IBM is the single largest shareholder in Intel, a top Silicon Valley semiconductor manufacturer that has been leading the charge against the Japanese.
Neither Intel nor IBM will confirm reports that the semiconductor company has sought to recruit the influential computer giant as a lobbying partner in the SIA's efforts to secure a broad base of political support in Washington. At this time, IBM does not endorse Intel's action in any way, the spokeswoman said.
"We respect Intel's right to do this," she said. "We do not oppose any company exercising its legal rights. However, IBM wasn't consulted on this.
"Yes, low [chip] prices benefit IBM, but if companies are being harmed by unfair trade practices, we believe they should take their case to the U.S. government."
Even though IBM is a major purchaser of such chips and also manufactures them, the company "does not know" if the Japanese semiconductor companies are pricing below their manufacturing costs, she said.
Similarly, Texas Instruments Inc., one of the world's biggest semiconductor manufacturers and an SIA member, believes that "an investigation [of Japanese pricing] is appropriate" but, according to a spokesman, the company declines to support SIA allegations that the Japanese are engaged in predatory pricing.
"If that's what they say, that's what they say," AMD's Scalise said. "We've developed a position that I believe in large part is supported by the association."
Scalise and other semiconductor industry lobbyists declined to say they are disappointed by the lack of active support and their inability to attract allies in the electronics industry.
For example, the Computer and Business Equipment Manufacturers Association (CBEMA) has declined to take a stand in support of the SIA despite its own publicly expressed concerns about Japanese competition.
There is, however, a clear unanimity in the SIA's call for trade reciprocity with Japan, with companies from IBM to Hewlett-Packard to the independent manufacturers such as Intel and AMD calling for greater access to the Japanese electronics market.
But in a speech in Tokyo yesterday, Electronics Industries Association of Japan President Toshio Takai said that, "Because of the lowness of the price of chips in the Japanese market, I believe it is very difficult to increase the sales of U.S. [chips] here."