### 3.2 Evolution of Japanese Electronics Industry in Asia

The history of Japanese electronics industry's overseas production in the APR can be divided into three stages, according to the main characteristics of the investments: 1) the 1960s; 2) since the 1970s to the first half of the 1980s; 3) since the mid-1980s to today.

Table 3.4 summarizes the results of a research conducted by EIAJ on Japanese production facilities abroad in electronics and is helpful in underling the major structural changes occurred in the pattern of industrial transfer towards Asian countries. The last part (D) of the table shows the total number of facilities up to 1990, divided by regions and groups of products. The three other parts follow the time partition: up to 1969 (A), since 1970 to 1984 (B), and since 1985 up to 1990 (C).

At the end of the period, the cumulative stock of FDI originated from a total of 770 companies of which around 60% were located in Asia $ ^{21} $ , 15% in Europe and 20% in North America. More than half of the projects were involved in the production of electronic parts (452), especially microelectronics, around 30% in consumer goods (224) and less than 20% in industrial goods (146) $ ^{22} $ . The largest share of the total production transferred to Asia was held by electronic parts (68%), followed by consumption goods (25%) and finally by industrial goods (7%). The concentration of projects in the sub-sector of electronic parts was higher in the case of the NIEs (75%), while the ASEAN4 countries received a fairly good share also in consumer goods (35%). Among the NIEs, Taiwan received the largest number of Japanese projects (98), while among the ASEAN4 the preference has been addressed to Malaysia (94 cases).

## First stage : the 1960s

During the 1960s, the NIEs were starting their process of industrialization by means of import substitution policies aimed to increase the internal standards of production and lessen the dependency from the competitiveness of the imported products. In particular, among the tools adopted by the governments, there were high tariffs on imported consumption goods, also levied on consumer electronics products. It was in this environment that the Japanese electronics multinationals started to transfer their production activities to the Asian countries, mainly for the purpose of serving the internal markets for home appliances, following the policy for infant-industry protection. Japanese MNEs initially started with assembly operations in simple consumer goods, like black and white television sets or radio receivers, which would have been eventually expanded to electric fans, refrigerators and irons.

At the end of 1969, Japanese production facilities abroad amounted to 75 for the whole electronics industry. Out of these, 46 were relocated to Asia (NIEs and ASEAN4), principally in the field of consumer electronics (19) and electronic parts (25). Taiwan, in particular, was able to attract the largest share of FDI receiving 10 projects in consumer electronics and 19 in the production of electronic parts. With regard to the total of Asian countries, a larger share of projects in electronic parts compared to that in consumer goods, as indicated in table 3.4, can be misleading to the real tendency occurring in this period. In fact, if accounted in terms of capital flows instead of number of projects, the total amount of investments in consumer electronics resulted almost ten times larger than that in electronic parts. Furthermore, according to the results of the above-mentioned research (not presented in the table),