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There is a Crack in the Screen for Japanese TV Manufacturers

There is no question that television manufacturers in Japan are disappearing as fast as melting ice. Their competition is headquartered in Korea, China and the United States. Japanese electronics manufacturers continue to lose market share in this very competitive global arena.

Let’s take a look at the retail market in the United States. The big box stores allocate a lot of space to the flat panel TV segment, and almost every television manufactured is on display. If you want to buy a television, you will most likely end up in one of these big box stores.

The first store I visited was Wal-Mart in New Hampshire. There were at least 50 television sets on display. Their sizes range from 19in to 84in, and many were the new 4K HD models. Almost two thirds of the televisions on display were manufactured by Korea-based Samsung Electronics. LG Electronics, another electronics giant in Korea, had the second biggest presence, while the rest were those from Chinese and American manufacturers. There was only one television brand on display that was manufactured in Japan – Sanyo. I don’t know where this item came from. Sanyo was acquired by Panasonic a couple of years ago, and the brand name is no longer used on any of their products.

The second big box store I visited was Best Buy, a major discount chain store for electronics and appliances. The retail footprint for television sets was the same as that of Wal-Mart. Samsung had the lion’s share of the space, and most of their product lines on display are high end products, including the new curved LCDs. The leftover space was filled with a variety of manufactures including Sony. I did not find a single television on display that was manufactured in Japan.

Ten years ago, most of the display space was occupied with television sets made in Japan. This list of names included Panasonic, Sony, Sharp, Toshiba, Sanyo, Hitachi and more. Sony was probably considered the leader of the pack. Back then, TV sets made in Japan were considered very reliable and consumers would never consider buying a TV manufactured in Korea or Taiwan. For this reason, brands like Sony commanded a higher retail price simply because of its name.

Fast forward ten years, the marketplace has changed considerably. Consumers have no problem purchasing electronics that are made in Korea. Products made in Korea are considered reliable and competitively priced. Korean manufacturers are also providing new products such as curved panels and OLED panels.

The outlook is not so good for Japanese TV manufacturers. Toshiba has plans to close all overseas TV manufacturing and sell all their plants. They will use EMS firms for manufacturing. For its part, Panasonic will close several foreign operations due to shrinking demand, while Sharp is also scaling down.

Japanese companies are all in the same boat. When business was booming, their forecasts were extremely optimistic, so they invested huge amounts of money to expand their manufacturing capacity. They did not see any competitor from outside the country. Now, there is not enough business to support these new manufacturing plants. There will never be a return on investment, and they are losing money month over month. The TV segment is no longer profitable for them.

I am advising Korean and Taiwanese companies to not make the same mistake.

Unfortunately, history always repeats itself.

Headlines of the week

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

1. Toshiba (Major electric & electronics company in Japan) 2/5

Has agreed to co-develop the next generation photolithography process, “Nano-In- Print Lithography” with SK Hynix in Korea.

2. Mitsubishi Plastic (Major plastic resin supplier in Japan) 2/9

Have founded a new subsidiary Daia Plas Film to expand plastic film business in EMC and medical market.

3. TMJ (Softwear supplier in Japan) 2/9

Has agreed to work together for a new R&D project of voice analyzing system with Smart Medical. The new system will be capable to analyze feeling of the speakers.

4. Mitsubishi Electric (Major electric & electronics company in Japan) 2/12

Has commercialized a new power module “J Series T-PM” in a small package CSTBT for automobile applications. The package became 36% smaller.

5. Alps Electric (Major device manufacturer in Japan) 2/12

Has unveiled a new low height compact connecting device “micro clip” for wearable products. Size: 1.4 x 1.4 x 0.7 mm.

6. Panasonic (Major electronics company in Japan) 2/13

Has developed the largest non-spherical lens up to 75 mm diameter for high brightness projectors.

7. LG Electronics (Major electronics company in Korea) 2/16

Has unveiled a new wearable device “LG Watch Urbane” with 1.3” p-OLED panel (320 x 320 pixel) for typical citizens.

8. Sony (Major electronics company in Japan) 2/17

Has unveiled a new wearable device kit, “SmartEyeglass Developer Edition”. It has tight interaction with smartphones.

9. Epson (Major electronics company in Japan) 2/18

Has unveiled a new 16 bit MCU “S1C17W03/04” with flash memory (16/32kB) packaged in 5 mm SQFN or 7mm TQFN.

10. JEITA (Electronics industry organization in Japan) 2/19

Total domestic shipment of electronics industry in January was 89 billion yens, 21.9% decline from the same month of the previous year.

11.  TSMC (Major semiconductor manufacturer in Taiwan) 2/19

Will invest 3.49 billion NT$ for Fab15, 300 mm wafer plant in Central Taiwan Science Park to expand the manufacturing capacity. The new equipment was already ordered to manufacturers in Europe, North America and Japan.

Please find the full articles here.

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For more information contact:

Dominique K. Numakura, dnumakura@dknresearch.com

DKN Research, www.dknresearchllc.com