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IP: Flat-panel effort -- fro the fukuzawa () UCSD EDU list
From: David Farber <farber () central cis upenn edu>
Date: Fri, 29 Sep 1995 01:44:03 -0400
Flat-panel effort criticized Tech agency: Little chance U.S. will catch up withJapan By Lee Gomes Mercury News Staff Writer Some of the principle assumptions behind a major federal effort to create a domestic flat-panel display industry have been challenged in a report by a congressional agency, which also takes a pessimistic view of whether U.S. firms ever will be able to catch up with Asian flat-panel competitors. The Office of Technology Assessment -- which goes out of business Friday as a result of Republican budget cutters -- called into question the Pentagon's oft-repeated assertion that it needs to create a vibrant American flat-panel sector for national security reasons. Instead, the report said, the Pentagon might get a better deal if it did what American computer companies do -- get their parts in Asia. Flat panels are the display screens used in laptop computers and a new generation of camcorders. In recent years, the federal government has spent hundreds of millions of dollars trying to develop an American-based display business, with various Pentagon agencies providing the lion's share of the money. The Pentagon's plan has been to create an American industry that sells to both the military as well as the much larger commercial electronics market. Pentagon planners have argued that relying on Japan for most flat panels is a security threat to the United States. That's because, they say, flat panels are playing an ever-larger role in high-tech weaponry, yet military planners can't be assured of having either a steady supply of them or a way of influencing their design. But with flat panels increasingly becoming a commodity item, the OTA questioned the Pentagon's logic. For one, it said, Korea and Taiwan are both developing active flat-panel industries, resulting in second and third sources for the devices. That competition, in turn, has prompted major Japanese display firms, such as Sharp Electronics, to take a much more accommodating stance with U.S. military buyers. And in recent months, those buyers have had increasing, contacts with Japanese suppliers. With the odds seeming to favor continued dominance by Asian countries because of the billions of dollars they have spent on their industries, ``it's not at all clear how government investments can help,'' said Paul D. Semenza, chief author of the study. Washington's recent flat-panel work is precisely the sort of effort favored by many of the technology policy ``activists'' who came to power in the Clinton administration. What's significant about the OTA report is that the agency is usually regarded as being cut from the same ideological cloth as the Clinton activists -- yet it came to a strikingly different conclusion about a program that has darling status in some Washington policy circles. Semenza noted the study said nothing one way or the other about the wisdom of the growing investments by private American companies in various flat-panel efforts. He did, though, say that if a successful U.S. flat-panel industry is as important to high-tech companies as many of them say it is, then those firms should perhaps be chipping in more money themselves, and relying less on help from the federal government. It's unclear what effect the report will have on Congress. The Republican majority, after all, thinks so little of the agency that it did away with it. And while those Republicans were hostile to nearly all Clinton-style technology programs, they have made an exception to programs originating in the Pentagon, including those involving flat panels. There are three endeavors in the South Bay that rely, in part, on federal funds: a high-definition display program at Xerox's Palo Alto Research Center; a consumer-oriented manufacturing effort under way at Silicon Video Corp.; and the San Jose-based U.S. Display Consortium, which gives grants for display supply companies. Consortium director Michael Ciesinski said that the bulk of the funds for all three programs appeared to be safe, at least for the coming fiscal year. They may become a problem in coming years, he said, as the defense budget undergoes further scrutiny, and in that regard, the OTA study might make it more difficult to convince Congress to keep the money coming. The OTA report was circulated throughout the flat-panel industry for comments; Ciesinski said the final draft incorporated many of the strong criticisms that had been directed at it. He said, though, that he still disagreed with some of its conclusions. ``We're much more optimistic about a domestic industry than the OTA is,'' he said. Published 9/28/95 in the San Jose Mercury News.
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- IP: Flat-panel effort -- fro the fukuzawa () UCSD EDU list David Farber (Sep 28)