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Until the introduction of the Fender Squier series, Fender had never produced lower priced guitars based on its main Stratocaster and Telecaster models and had always used different model designs for its lower priced guitars.In the late 1970s and early 1980s Fender was facing competition from lower priced Japanese made guitars.The series included the Supersonic guitar, the Venus guitar (co-designed by Courtney Love), the Jagmaster (a hybrid of the Fender Jaguar and Jazzmaster models), and a re-issue of the Musicmaster Bass.

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Yamano Gakki was known for once being part of Epiphone Japan.Kanda Shokai owned the Greco brand name and one of the conditions of the Fender Japan agreement was that Kanda Shokai cease production of its own Greco Fender copies.Fender was also losing sales in Japan to Japanese guitar brands such as Tōkai, Greco and Fernandes and the establishment of Fender Japan would benefit Fender sales in Japan, as well as overseas.Fender began negotiations with several Japanese musical instrument distributors and reached an agreement with Yamano Gakki and Kanda Shokai to establish Fender Japan.Tokai was seriously considered to start building the first Japanese made Fenders, but after a breakdown in negotiations, Fuji Gen Gakki was chosen instead.

The initial Squier models were launched on July/August 1982.

The VM line draws from a wide range of Fender instruments, and has resulted in a large variety of models with many different feature combinations. S = Samick, E = Young Chang, E letter serial numbers were used on Young Chang's Fenix brand guitars.

Vintage Modified guitar models include Stratocasters, Telecasters, Jaguars, Jazzmasters and Mustangs. The first number following the serial number prefix is the year.

The SQ Squier series was introduced in late 1983 to early 1984.

The SQ Squier series was based more on 1970s Fender models and also had USA made pickups installed.

The large Fender logo of the export Squier series was soon changed to a large Squier logo.