Intel wary of Japan's Y2K efforts
JOHN BOYD'S COMPUTER CORNER
The Japan Times
26 May 1999Intel is in paranoia mode. After getting its own house more or less in order vis-a-vis the Year 2000 bug, the company finds that there is still an awful lot to worry about. Especially so in lackadaisical and secretive Japan, where electronics manufacturers are key global suppliers.
As the world's largest semiconductor manufacturer, Intel has 14 factories around the globe, churning out millions of microprocessors and other chips each month. All of these factories have been put through rigorous testing to ensure that their critical computer systems will be able to handle the millennium change.
But the moment Intel executives congratulated themselves over the progress of their remedial efforts, warning bells clanged.
"We suddenly realized that if we fix all our internal systems, and we get all our suppliers fixed, but our factories don't have the support they need from the external infrastructure where they're located, then they're in trouble," said Don Rose, general manager of Intel's Year 2000 Projects group.
Propelled by paranoia, Intel formed a special Y2K team, and set off to visit each factory.
"We looked at the risks we had if there were a Year 2000 failure in electric power, telecommunications, water, sewer gas and critical transportation facilities," Rose said during a visit last week to Japan. "Because a typical product at Intel moves in and out of three factories before it is finished."
The Y2K team met with each factory's infrastructure providers and discussed their Y2K readiness program. "We found some programs were world class, and some that were nonexistent," Rose said.
In the cases that impacted Intel, the team put together an action plan that got the senior management of the providers involved, while Intel donated training and other aid such as Y2K software test programs.
There are no Intel factories in Japan, but there were still reasons to worry. Toward the end of last year Intel sent out teams to audit its major global suppliers' Y2K programs, including about 100 companies in Japan. That's when the silicon hit the fan.
"The single biggest finding that came out of this audit program is that our suppliers in Japan were in a terrible state," Rose said.
"Most of them had not started a program, or the programs were totally inadequate. They were depending on hearsay, or were taking undocumented promises that equipment was compliant, without doing any testing, or asking to see test results."
Yet within months after getting Intel's risk assessment, "most of those suppliers had turned around and have put together really solid programs," said Rose, who now believes they will enter the next millennium at relatively low risk.
Unfortunately, the story doesn't end there. The discovery that its Japanese suppliers were so far behind at such a late date shook Intel. So it began questioning its customers here, i.e. the domestic PC vendors.
"In most other regions of the world, our customers openly shared with us what they'd done on Year 2000, and what they had or hadn't done with their suppliers," said Rose. "But it was not easy to get information from Japan."
When Intel encountered the same secrecy with Japanese infrastructure providers, it became outright disturbed. So it asked its suppliers to go out and get answers; they too drew a blank. That tipped Intel over the edge.
"We've pretty much come to the conclusion that there is no information (available)" Rose said. "It's the only place in the world where we don't have the information."
This lack of disclosure is what brought Rose and colleague Richard Hall, manager of corporate government affairs, to Japan last week.
They have been working with the local offices of the American Electronics Association and the U.S. Semiconductor Industry Association "to generate some activity to either openly disclose that there are no problems. Or to get activity happening that would reduce risk where there are problems," Rose said.
According to Hall and Rose, given Intel and other U.S. IT companies are heavily dependent on so many Japanese electronics manufacturers, a Y2K calamity in Japan would create a serious disruption in the U.S.
Hall pointed out that there are still seven months left. "And a lot can be achieved in seven months. But the first step has to be disclosure of whatever the problems or issues are. And that's what we can't achieve here yet."
If left at that, there would be good reason for us all to become paranoid. Yet coinciding with Rose and Hall's trip was a visit from the U.S. government's Special Committee on the Year 2000 Technology Problem.
And contrary to Intel's experience, committee officials, in their first four days in Japan, at least, indicated they were satisfied with the openness of local governments in Kansai and executives of utility companies there.
Neither Intel nor Committee officials could account for the different reactions. But until Intel gets some data that verifies things really are progressing, it remains in paranoia mode concerning Japan's efforts. And with good reason, given the experience it's had with its own suppliers. Stay tuned.
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