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EPTE Newsletter: Japan Market Conditions Changing Drastically

The Combined Exhibition of Advanced Technologies (CEATEC) is a five-day electronics trade show held at Makuhari Messe in Chiba Prefecture in Japan October 7-11. I visited the show on Saturday--the last day of the event.  Admission was free and the show was packed. I discovered a few surprising things during the show, but was unimpressed overall.

CEATEC was once called Electronics Show Japan and, without question, it was the benchmark for trade shows throughout the world during 1980s and 1990s. No other show could compare relative to square footage, show attendance, and exhibitor participation. It was the largest event for consumer electronics and related industry including components and materials. CEATEC is similar to the Consumer Electronics Show (CES) held in Las Vegas, Illinois each year. One difference is the exhibitors are the manufacturers who showcase their products--there's a mix of attendees that include the media who report on technology and business trends; directors from sales teams to understand the market trends; and engineers who are looking for new R&D direction.

Unfortunately, market conditions in Japan have changed drastically during the last few years. Large Japanese electronics companies lost market share, along with the prestige of being the market leaders in business and technology. The CEATEC JAPAN reflects this downturn as it continues to shrink year over year. Floor space is one third of its size compared with the most popular years. Over 600 companies attended this year, but only 300 booths were rented. Many companies are feeling the pinch and decided to share booths to cut costs.A couple of big name Japanese companies (Sony and Hitachi) as well as some larger sized overseas companies (Samsung Electronics) didn’t even show up. The vacancies left from these companies were filled with component suppliers and connector manufacturers, including TDK, Alps Electric, Murata, and TE from the U.S. These companies were primarily component suppliers, but, once the recession began, they were forced to diversify and provide new electronic systems. Japanese PCB manufacturers are suffering also. None were in attendance at the show and many consider them no more than subcontractors for the Japanese electronics industry.

Several local governments and universities reserved space at the show to showcase their technologies and academic R&D projects.This venue was not suitable to promote their schools--it's more of a platform for companies to introduce their electronic technologies.

Taiwanese, Chinese, and Korean companies reserved a large amount of floor space. There were more than 30 Taiwanese companies and organizations in a special zone made up of mostly small manufacturing firms looking for subcontracting work in the electronics industry. I think it's a struggle for these companies to secure work in a shrinking industry. I plan on following up with a couple of companies I discovered with some unique technologies.

4K TV was the main topic of the event last year. But this year, even though most companies still discussed 4K TV, the market has all but evaporated. NHK and JEITA are now featuring 8K TVs, but there was little interest in this and not many visitors stopped at their booths.

Many companies are promoting products that center around some popular topic in the electronics world. Buzz words include: car electronics, robotics, wearables, and healthcare. Many companies were aggressively demonstrating the capabilities of their new technologies and new products using these buzz words, but there was really nothing new--they more or less improved on existing products. No one company stepped up and created the next greatest “must have” product.   

CEATEC designated a large amount of space to feature exhibits that were interactive for children and others not affiliated with the electronics industry. The exhibitions included All Japan Robot Sumo Tournament, Experiences from Powered Suits, Trial Class of Fuel Cell Powered Automobiles, and Personal Mobility tours provided by Honda. I do not think there's much of a market for any of this yet, but it did foster interest with the children. This could create a spark for some of them. Perhaps in a decade or so their studies will take them into an engineering career. I hope the Japanese electronics companies can survive over the next decade.

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. Toshiba (Major electric and electronics company in Japan) 10/6The company has developed a new humanoid robot for healthcare applications. It looks human and is capable of natural communications, including sign language. 2. SCREEN (Major equipment supplier in Japan) 10/6The supplier has unveiled the 3D coating system, “80EX Spray Coater,” for photoresist manufacturing process of MEMS devices.3. Hiroshima University (Japan) 10/6The university has developed a new thermal/electric conversion material based copper sulfide compounds without expensive rare earth materials.4. Toppan Printing (Major printing company in Japan) 10/6The company has developed a new molding process for biomass plastic made from recycled papers. The process will reduce consumption of plastic resins.5. Toshiba (Major electric and electronics company in Japan) 10/9The company has received an order for 10,000 units of a lithium ion battery system (10 kW/unit) from Eneres Co., Ltd., an energy management service firm. 6. NEC (Major electronics company in Japan) 10/10The comapny has received an order for submarine optical cable from Asia-Africa-Europe Consortium (AAEC) in Hong Kong and Thailand.7. Teijin-DuPont (Plastic material supplier in Japan) 10/14The supplier has developed a new PEN (polyethylene naphthalate) film, “Teonex QF,” with the lowest flammability of UL94 VTM-0.8. Hitachi (Major electric and electronics company in Japan) 10/14The company has developed a new optical engine for head mount displays.9. JDI (Major display manufacturer in Japan) 10/15The manufacturer has decided to close its Fukaya Plant in Saitama prefecture in April 2016 as part company wide restructuring. JDI will file a special loss of 7 billion yen.10. NTT DATA (Major telecommunication company in Japan) 10/15The company has developed a new augmented reality (AR) technology that implements non-keyboard input processes for wearable smart glass.

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