"Well, why not? We're the ones told them they were supposed to be capitalists."
"In truth. But just like in fairyland, our princess had a problem. See, these chips weren't as simple to copy as an internal combustion engine, or even a transistor. They're a heck of a lot more complicated. And to make things worse, back when America was inventin' these silicon marvels, nobody in Japan would've known one if it'd bit him on the butt. So it's a tall order." He crumpled an empty cigarette pack and reached in his coat for another. "Now, imagine you're these guys in MITI. You want to take over an industry you don't know the first thing about. How're you gonna start?"
"I'd probably begin by licensing the patents."
"Nice try, but you don't want this job to be too straightforward. Then everybody'll suspect what's happening, and besides, it wouldn't be as much fun. So if you're this guy Noda, you decide to set up a sort of Manhattan Project, like America had to make the first A-bomb. You go over to see Nippon Telephone and Telegraph, their AT&T, and you say, 'Boys, we just decided you're gonna pitch in with all you got. After that, you commandeer some labs at Toshiba and NEC. Then you get yourself a batch of these little American gizmos and start trying to figure out how the hell they work."
Henderson poured himself another drink, then turned back. "Now, since you need to catch up fast, you do a little 'reverse engineering,' which means you steal the other guy's R&D. You take a bunch apart and decide you'll go with the 16K RAM chip made by Mostek—a big outfit here that's since gone belly up, by the way, thanks to our friends at MITI. And by 1978 you've made yourself a Mostek clone. Bingo, you've got the technology."
"I think I'm beginning to get the drift."
"Whoa, buddy. You're just starting to get rolling." He forged on. "By this time everybody's wanting these chips, so all of a sudden Silicon Valley can't keep up. Now you and your boys at MITI are ready to move. You've got the know-how, so all you need to do is start turning them out by the truckload. Of course that takes millions and millions in plant investment, so you do what Asano did, bring your old pal Noda back into the picture. Since he's now running the Japan Development Bank, he obligingly lines up a whole shit-load of cheap money for these outfits gearing up to chop America's nuts off. All in all, he gets together what amounts to a subsidy of low interest bucks to the tune of about two billion dollars. All carefully laundered. Ready, set, go.
"Silicon Valley glances up from countin' its receipts and all of a sudden, from out of nowhere, here come your Japanese chips. Reeeal cheap, since you've got all these cheapo 'loans' to capitalize your plants. Inside a year you've got nearly half the market.
"Now, you figure somebody's surely going to blow the whistle, so you can't believe your luck when Silicon Valley thinks you're some kind of joke. Come on in, they say, and sell as many of those crappy 16K models you can, since we've got ourselves a hot 64K version cooking, and that's where we're gonna make our real killing. When you hear this, you do a quick retool. And while the Valley is seeing how sexy and expensive a design they can come up with, your thrifty gang back home just sticks together a bigger version of that 16K chip you stole from Mostek in the first place—and you're out front with a 64K. Now it's time for hardball, so you flood America with these things. You drop the price of your 64K RAM chips from thirty dollars down to half a buck when they still cost over a dollar to make. Before you know it, you've got seventy percent of the American market."
"You're selling at a loss. Dumping."