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EPTE Newsletter from Japan - Iceberg Dead Ahead - The Japanese Electronics Industry

Sanyo Electric, a major electronics company in Japan, was involved in a few business scandals over the last few years, which attributed to its weak performance in 2007.  Sanyo's CEO resigned amid these scandals and the company decided to shed several key businesses including cellular phones and semiconductors. Kyocera, another significant electronics company, agreed to purchase the cellular phone division; unfortunately, the semiconductor plant suffered structural damage from an earthquake, and Sanyo is finding it difficult to broker a deal with an appropriate buyer.  Sanyo seemed to be making a case for its weaker than expected results, blaming it on unscrupulous ownership, and an incompetent management team; however, the bleeding is widespread throughout the Japanese electronic industry as more bad news was reported over the last few months.

Mitsubishi Electric, another significant player in the electric/electronic field recently announced plans to cease operations with its cellular phone business.  More than a dozen Japanese electronics companies enjoyed the cellular phone market in Japan because of the closed market, although this atmosphere was beneficial, there were still too many manufacturers in this limited market.  Now, only the strongest can survive, and those incapable manufacturers are dropping out from the sector.  Sanyo was the first, Mitsubishi the second, who is next?

Pioneer, the leading company in the plasma display panel technologies, announced last week their plans to terminate production of PDP devices due to huge losses suffered quarter over quarter.  As a leader in the market, Pioneer developed many new technologies for PDP devices beginning in the early 1980s. Unfortunately, they struggled to compete with the lower prices offered from the Korean PDP manufacturers or LCD manufacturers in Japan.  Pioneer will not exit the flat panel TV business, and plan to procure PDP panels from Panasonic and LCD panels from Sharp and remain in the FPD TV business.

Last month, Casio Micronics, a major subsidiary of The Casio Group and a large taped circuit manufacturer revealed plans to sell its Tape substrate business that includes the TAB and COF divisions. There are not many manufacturers in this industry; however, most invested too much money over the last two years in an effort to increase their manufacturing capacities.  Unfortunately, capacity outweighs the actual demand from the worldwide FPD, and one industry expert commented to me that no manufacturers are turning any profits in this sector even though the flat panel TV market continues to grow.

It is not coincidental that many large Japanese companies have recently announced significant restructuring plans. The consumer electronics market is on the doorstep of recession, and this could signal the beginning of many reorganization plans within this industry. 

Dominique K. Numakura

DKN Research, www.dknresearch.com

P.S. One more news was added last week. Sony has decided to terminate the production of cellular phones for DOCOMO.

Headlines of the week

(Please contact haverhill@dknreseach.com for further information of the news.)

1.      Arakawa Chemical (Specialty chemical supplier in Japan) 3/3

Has developed a new transparent epoxy resin with an excellent mechanical property for the encapsulation of the optical devices.

2.      Asahi Kasei Electronics (Subsidiary of Asahi Kasei) 3/3

Has founded new subsidiaries in China and France for the local marketing and sales of the mixed signal semiconductors.

3.      Toray (Major material supplier in Japan) 3/3

Has developed a new electrically conductive polyester fiber to avoid the electrification of the materials.

4.      Taiyo Yuden (Major component supplier in Japan) 3/4

Will start the volume production of ceramic capacitors in China to cover the booming demands in China.

5.      NEC (Major electronics company in Japan) 3/3

Has developed a new general 3G IC packaging technology for the combinations of standard semiconductor devices for PoP.

6.      Tateho Chemical (Specialty chemicals supplier in Japan) 3/5

Has developed ultra high purity magnesium oxide (>99.99%) for electronics applications.

7.      Kureha (Second tier chemical company in Japan) 3/5

Has organized new business division for carbon fiber materials and battery materials.

8.      Toray Dow Corning (Silicone resin supplier in Japan) 3/5

Will commercialize a new transparent silicone resin as the encapsulation material of the high-brightness LED.

9.      Funai Denki (Major electronics company in Japan) 3/6

Has agreed to procure 4 million LCD panels in 2008 from CMO, major LCD manufacturer in Taiwan for the flat panel TVs.

10.  Panasonic Electronic Devices (Major device supplier in Japan) 3/6

Has commercialized a new thin sheet switch built on transparent film by screen-printing process for LED light sources.

11.  Watanabe Seisakusho (Micro motor supplier in Japan) 3/6

Has developed a new micro motor without rare metals for the generation of vibrations in the cellular phones.

12.  Toray (Major material supplier in Japan) 3/7

Has developed a new blue color luminescence material for the full color organic EL display devices.

13.  Canon (Major camera manufacturer in Japan) 3/7

Will double the manufacturing capacity of the compact digital cameras in China to 10 million units per year.

Interesting literatures about the packaging industry

Articles of DKN Research

1. New "Screen Printing for High-Density Flexible Electronics", Robert Turunen, Masafumi Nakayama and Dominique Numakura, Printed Circuit FAB, October, 2007, http://pcdandm.com/cms/content/view/3846/95/

2. New "Total Process Solution for the High-Density Multi-layer Flexible Printable Electronic Circuits", (Japanese only) Dominique Numakura, Denshi Zairyo, October, 2007

3. New "The latest electronics package, Part XXXI, Cellular Phones", Dominique Numakura, Electronics Packaging Technology, October, 2007 

4. New "Coombs' Printed Circuits Handbook, 6th Edition, Part 15-Flexible Circuits", Dominique Numakura, McGraw Hill, New York, September, 2007

5. New "DKN Research Develops Film Base Connector", Circuits Assembly, September, 2007.

6. "Flexible Circuit Materials", (Japanese only) Dominique Numakura, Denshi Zairyo, April, 2007

7. "Business Trends and Technology Trends of the HDI Flexible Circuits -

Roadmap for the Ultra High-Density Advanced Flexible Circuits", Dominique Numakura, KPCA, October 31, 2006

From the Major Industry Magazines

1. "WASTE NOT, WANT NOT WITH LEAN SIX SIGMA", SAMUEL PONCE, CircuiTree, February, 2008.

2. "Embedded Active Components for High-Reliability Products", Jim D. Raby, Circuits Assembly, January,  2008.

3. "Inside Reflow", Gail Flower, SMT, January, 2008

4. "OPTOELECTRONICS Comes of Age", Bruce L. Booth and Jack Fisher, Printed Circuit FAB, February, 2008.

5. "The Thermal CPB -An Approach to Thermal and Power Management-", Paul A. Magrill, Advanced Packaging, January/February, 2008

7. "Under the Hood, Efficiency vs. Speed", presented by EE Times and Techonline, October 8, 2007