Since the debut of the transistor in 1947, semiconductors have been at the heart of the electronics revolution. The many products and processes that have evolved alongside this industry span the high-technology “food chain,” from equipment and materials upstream to computers down-stream. Not surprisingly, policymakers have long identified success in the semiconductor industry as a necessary prerequisite for competing in high technology more generally. The U.S.-Japan “chip” rivalry thus warrants close attention in theorizing about the calculus of strategic trade.

Much has been written about semiconductors, and Japan's inroads into the market for dynamic random access memories (DRAMs), in particular. The interest in DRAMs owes to the fact that these and other memory chips, such as static and video RAMs, serve as “drivers” of semiconductor technology more generally. Their simplicity enables vendors to gain experience, achieve scale and scope efficiencies, and compete for other segments of the industry. Market share in RAMs is thus a springboard into more complex devices, including a variety of logic chips. In this respect, Japan's success in the market for RAMs has been regarded as perhaps the greatest challenge to “American reliance on laissez-faire toward the commercialization of technology.”

Washington, however, has hardly left the American semiconductor industry to fend for itself. Government spending on R&D has contributed to nearly every development in this technology since the transistor first made its debut. Through the 1960s, procurement by the National Aeronautics and Space Administration (NASA) and the Department of Defense accounted for most of the nation's semiconductor output (100% until 1962), facilitating the jump made by U.S. firms from germanium to silicon in the first stage of this commercial rivalry.