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EPTE Newsletter from Japan: Industry Trips Out of the Gate

In the previous issue of the newsletter, I spoke about financial markets in Japan, which continue to surge as the Bank of Japan embarks on a bond purchase of more than $78 billion a month to try to double the amount of money in circulation. The new prime minister of the cabinet asked the Bank of Japan to supply more cash through bond buying with the hopes of creating inflation. The Japanese yen continues to depreciate against other foreign currencies, while the Tokyo Stock Exchange reaches new highs every week. I wish I could say the same about the electronics industry. Unfortunately, the remarkable decline this industry suffered during year end continues into 2013.

The Japanese yen depreciated to 99 yen against the dollar, while the Nikkei Index rose more than 40% over the last three months. The price of gold shot up to over 5,200 yen per gram last week, and TV news reports showed long lines of people in front of “cash for gold” stores. Another business sector heating up as equity investment vehicles become more attractive is investment seminars organized by security companies.

Unfortunately, all business indexes for the electronics industry point downward since the start of the new year. Global semiconductor shipments declined even further during January 2013 compared to December 2012. This decrease affects all countries with semiconductor manufacturing, especially those located in Asian countries. Digital camera shipments from Japanese manufacturers remained at extremely low levels during January and February. Shipments for TVs with a screen size smaller than 40” manufactured in Japan were at almost zero in 2012, an unbelievable 98.6% decline compared to the previous year. There is no sign of a rebound this year. Panasonic, the largest consumer electronics company in Japan, annonced it will exit the TV industry in the near future.  

Business for cell phone manufacturers isn’t any brighter. Cell phone shipments from Japanese manufacturers in January dropped by more than 65% compared with the same month last year. NEC, a major manufacturer in Japan, announced plans to cease all cell phone manufacturing in 2013.

The number of circuit board products manufactured in Japan dipped even further in January compared to December. Core products from the industry include build-up multilayer rigid boards, double- and multilayer flex circuits and rigid module substrates. Shipments for these main staples fell by almost 40% in January compared with the same month last year, setting a record for the lowest volume in three years. One of my business associates, an expert in the printed circuit field, told me that February data will be even worse than January’s.

The financial markets and electronics industry in Japan are heading down two different paths that began in December 2012. The new Prime Minister is sure that an increased supply of money will stimulate investments and inflation will encourage business for manufacturing industries. However, the cash supplied by the Bank of Japan may become speculation money and may not end up as its intended use. The increased cash supply will take a long time to trickle down to the manufacturing industry. Let’s hope the trickle down doesn’t take more than a few months.

Dominique K. Numakura, dnumakura@dknresearch.com DKN Research, www.dknresearchllc.com

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Headlines of the Week

(Please contact haverhill@dknreseach.com for further information on the news.)1. Mitsubishi Material (Major material supplier in Japan) 3/29The supplier has developed a new sol/gel process for the PZT thin film manufacturing process for MEMS devices. Deposition is speed four times faster.2. Panasonic (Major electronics company in Japan) 3/29The company will supply nickel/hydrogen secondary batteries Subaru's new hybrid vehicle, the Cross Treck Hybrid.3. Innolux (Major display supplier in Taiwan) 4/2The supplier could be chosen as the supplier of 4.7” LCD panels for Amazon smart phones. 4. CIPA (Industry association in Japan) 4/1The association reported that digital camera shipments of Japanese manufacturers declined 49.7% to 4.26 million units in February when compared to the same month last year.5. Canon (Major electronics company in Japan) 4/2The company will roll out a new laser facsimile, “Canofax L410,” featuring high-speed and high-security for business use.

6. Citizen Electronics (Major device supplier in Japan) 4/5The supplier has rolled out a new LED lighting device, “COB Series, Version 2,” featuring a high luminous flux of 20,190 lm. Efficiency was improved by 38%.

7. Shibaura Mechatronics (Major equipment supplier in Japan) 4/5The supplier plans to expand its ink jet printer business to the semiconductor and automobile markets. 8. AUO (Major display manufacturer in Taiwan) 4/9The manufacturer has unveiled a new full HD 5” OLED smart phone display panel with a resolution of 443ppi.

9. Nippon Electric Glass (Major glass material supplier in Japan) 4/10 The supplier has unveiled a new non thermal expansion glass, “ZERO,” with a CTE of 1.0 x E-7/K (-40 to ~80 degrees C).

10.  Asahi Chemical Research (Ink supplier for printable electronics in Japan) 4/10The supplier has commercialized a new silver ink paste, “LS-470 Series,” for the laser scribing process. It can generate fine lines down to 20 microns.Recent Articles from DKN Research

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