SEMICONDUCTORS: No Thanks, No Memories

Even when the Government gives its blessing, U.S. microchip makers cannot bring themselves to collaborate. Their deep-down resistance to joint efforts came to the surface last week with the scuttling of U.S. Memories, a consortium formed seven months ago by American firms to compete in the Japanese-dominated market for memory chips. With such powerful backers as IBM and Digital Equipment, U.S. Memories planned to build a $1 billion plant to produce chips for everything from personal computers to missile-guidance systems. But a worldwide glut of memory chips, which has pushed prices lower, prompted many would-be investors to back out of the project.

The collapse raised fresh doubts about the ability of U.S. companies to challenge Japanese chipmakers, who often seem to act in concert. As U.S. Memories faltered, major Japanese firms made a series of production cuts to strengthen chip prices and geared up to develop advanced new products.