America's most sophisticated weapons are rapidly becoming dependent on components imported from Japan -- a development that has touched off debate inside the Pentagon over what, if anything, should be done about it.
Defense industry sources are particularly concerned about the Strategic Defense Initiative -- or "Star Wars" -- system, where Japanese high-technology companies now outstrip U.S. defense contractors in several key technologies vital to the development of such a system.
While U.S. companies are able to do most of the SDI systems design work, the cheapest and most reliable hardware -- ranging from lasers to new materials -- is produced by the Japanese. For example, the Japanese have become the world's dominant supplier of computer memory chips -- a key element in many electronics-based weapons systems.
"It's a matter of fact that the Japanese have taken the technical lead in many of these key technologies . . . ," said Hewlett-Packard Co.'s materials research laboratory director, Robert Burmeister, who serves on a National Academy of Science panel on electronic components.
"Japan today has the technology base to be a major supplier to the SDI," said Richard Reynolds, director of the defense sciences office at the Defense Advanced Research Projects Agency, who added that the Pentagon now can buy advanced technology from Japan not yet available from U.S. suppliers.
"In some cases," he said, "you either buy from Japan or you don't get it."
This has raised serious policy concerns over whether the Pentagon should dramatically shore up this nation's high-tech manufacturing base -- potentially a very expensive undertaking -- or whether it simply should buy the best technology at the best price from a close ally.
Three high-level commissions are examining the military's growing reliance on overseas electronics: a newly formed Defense Sciences Board Task Force on Semiconductor Dependency; a panel of the Pentagon's joint logistics commanders; and a National Academy of Science Electronics Components Committee, which is expected to release a report next month asserting that "there is a very large and increasing dependence on Japanese components."
"There's no doubt that -- because of cost and quality considerations -- many defense groups are already buying from Japan," said Harvey Nathanson, a Westinghouse research director who leads an industry group pushing for increased defense funding for electronics materials research. "The question has got to be, is that good for us in the long term? A lot of the technologists are more concerned about the Japanese ascendancy. The 'equipment at the best price' procurement types aren't worried."
Largely through its strength in commercial electronics, Japan has rapidly become a strategic supplier of defense technologies to the Pentagon. Pentagon expenditures for defense electronics approach $56.5 billion a year, according to the Electronics Industries Association.
The Nakasone government in Japan has been encouraging the transfer of the country's advanced electronics to the U.S. military, and top Pentagon officials have welcomed increased participation by the Japanese.
"The change in the electronics has been the most striking and significant in the past few years," said Jacques S. Gansler, a deputy assistant secretary of Defense for material acquisition during the Ford administration and now a defense industry consultant.
Currently, there are no good estimates on what percentage of defense electronics components are produced overseas. However, House Armed Services subcommittee staff feels that roughly 80 percent of the military's silicon chips are manufactured in Asia.
Meaningful estimates of Japanese content of U.S. defense electronics are further complicated because U.S. contractors do not always have to disclose where the components for their electronics systems were originally made.
"There's no question that what the Pentagon needs to do is recognize the 'dual economy' that exists in the defense industry," asserted Gansler, who serves on the National Academy of Science panel. "We have large prime contractors providing systems, and we don't pay attention to the lower tier [of contractors] on which these systems are dependent. So we have this awkward system where the lower tiers are disappearing and going offshore; their significance isn't recognized.
"While we focus so much of our resources on the prime-contractor level, the real advances [in technology] often come from these parts and components."
In addition to volume supply, Japanese companies recently have begun to provide "critical" components for such weapons systems as missiles and electronic-warfare devices, according to Pentagon and industry officials.
Exacerbating that situation is the fact that, in some areas, Japanese companies have become the sole providers of high-quality, low-cost key electronics materials after winning price wars with American companies.
After Monsanto Co. dropped out of the market three years ago, for example, the United States no longer has a domestic supplier of "float-zone" silicon -- a special kind of silicon used in fabricating high-power electronic switching devices that would be indispensable for space-based weaponry. Japanese companies are the key U.S. defense suppliers.
Japan's dominance in the computer memory-chip market means that "we are captive of the Japanese in this commodity," said former assistant Defense secretary Robert Cooper, "but that's no worse than saying our Navy is captive to the supply of foreign oil."
Japanese companies also enjoy significant cost, quality and technical advantages in the production of gallium arsenide computer chips -- chips capable of processing data far faster than conventional silicon chips. The Defense Department has publicly identified gallium arsenide as a critical technology for the SDI. Japan provides the bulk of the Pentagon's gallium arsenide, according to defense electronics sources.
According to former Defense undersecretary of engineering Richard DeLauer, Japan also leads the United States in computer-chip packaging and fiber-optic technology.
Consequently, key U.S. electronics defense suppliers are pushing the Pentagon to invest more heavily in domestic suppliers and to reexamine procurement policies. They argue that the United States already is being hurt technologically by its dependence on Japanese high-technology materials.
"Even now, the Japanese are preselecting the quality of the silicon they ship," said Westinghouse's Nathanson, "In some Westinghouse plants, we're finding it difficult to get the [more advanced] silicon wafers [for power device production]. They themselves are now using higher-order material than they're willing to ship us."
However, Nathanson concedes, and several defense industry sources confirm, that prime U.S. defense contractors are becoming more reliant on Japanese companies to do the actual production work for systems components because of potentially superior manufacturing and price performance.
"This trend towards 'teaming up' with the Japanese is going to continue," asserts former Defense undersecretary William J. Perry.
That poses potentially awkward procurement situations for the SDI because leading advocates such as Assistant Secretary of Defense Richard N. Perle and SDI program director Gen. James Abrahamson have assured that the program will seek low-cost suppliers.
"We're trying to get the best technology at the lowest cost," said Perle, who added that he expects Japan to participate in the SDI.
However, most technology experts agree that, if the Pentagon is serious about obtaining the best high technologies at the most reasonable cost, most of the component production will be done offshore by Japanese high-technology concerns -- unless there are specific policies designed to minimize foreign involvement.