Download 2010 production forecasts for the global electronics and information

2010 PRODUCTION FORECASTS FOR THE
GLOBAL ELECTRONICS AND
INFORMATION TECHNOLOGY INDUSTRIES
December 15, 2009
JAPAN ELECTRONICS AND INFORMATION TECHNOLOGY INDUSTRIES ASSOCIATION
2010 PRODUCTION FORECASTS FOR THE GLOBAL ELECTRONICS AND INFORMATION TECHNOLOGY INDUSTRIES
FOREWORD
This report summarizes the results of a survey of companies participating in product
sector-specific boards in the Japan Electronics and Information Technology Industries
Association (JEITA). Thanks to the participation of these boards, one of the unique
characteristics of our association, I am confident of the high quality of the survey
results.
Japan’s electronics and information technology (IT) industries were deeply affected
by the global financial crises that began in September 2008 with the so-called
“Lehman shock.” Manufacturing adjustments and uncertain economic conditions
resulting from sudden decreases in stock prices worldwide, currency rate fluctuations
and the rapid drop in exports from Japan led to a feeling of economic suffocation
never felt before.
Completing this year’s survey was made all the more difficult by this uncertain
economic environment. However, JEITA held three study sessions with external
organizations, including trading companies, and implemented a survey of its member
companies. This work continued until mid-November in an effort to fully reflect the
economic environment and attain the most realistic forecasts possible.
The results of these endeavors are presented herein under the themes of “Production
Forecasts for the Global Electronics and Information Technology Industries,”
“Forecasts of Global Production by Japanese Companies” and “Forecasts of Domestic
Production by the Japanese Electronics Industry.”
According to the survey, taking into account the conditions outlined above, JEITA
forecasts that global production by the electronics and IT industries will at last hit
bottom, rising slightly in 2010 to the ¥20 trillion level. Nevertheless, this represents a
15% decline from the 2007 level. In particular, domestic production by Japanese
companies is seen dropping to 60% of the historical peak of 2007, to ¥15 trillion. On
the other hand, high growth levels should be attainable if product development
emphasizes market trends such as enhancing environmental friendliness.
The electronics and IT industries are gaining increasing attention around the world
for their potential to contribute significantly to global economic expansion and
countering global warming.
With these forecasts, our aim is provide a reliable reference for industry insiders
and the public at large. We therefore look forward to receiving the comments of
readers, which will help us improve the annual survey in years to come.
Tsutomu Handa
President
Japan Electronics and Information Technology Industries Association (JEITA)
1
2010 PRODUCTION FORECASTS FOR THE GLOBAL ELECTRONICS AND INFORMATION TECHNOLOGY INDUSTRIES
PRODUCTION FORECASTS FOR THE GLOBAL ELECTRONICS AND
INFORMATION TECHNOLOGY INDUSTRIES
In 2009, production by the global electronics and IT industries is seen declining 15% from
the previous year, to ¥190.3 trillion, owing to the global financial crisis that began in the
fall of 2008. However, the many fiscal measures implemented by countries worldwide have
helped bring the global economy in the direction of recovery, and for this reason global
production is forecast to increase 5% in 2010, reaching ¥200.4 trillion. Although the
immediate crisis seems to have passed, the global economy remains unstable, and
demand in the industries is expected to center on low-priced products with specific
functions, which will slow the process of recovery.
This year saw economies around the world slide
rapidly following the constriction of economic and
financial activities in the USA in 2008. Financial
turmoil spread from the USA and Europe to
emerging economies. Concerns such as the drop in
American property value and worsening corporate
results led to sudden inventory adjustments and
currency exchange rate fluctuations, pushing the
global economy into a state of uncertainty. In this
situation, production by the electronics and IT
industries (including solutions and services) is
estimated to decrease 15%, to ¥190.3 trillion. Of this
total, production of electronics (hardware including
electronic equipment, components and devices) is
seen dipping 19%, to ¥135.1 trillion. The electronics
and IT industries have grown at a rapid pace in recent
years, sustained by strong consumer demand against
the backdrop of economic growth in emerging
economies. However, needs are growing for lowpriced products—such as flat-panel televisions,
personal computers (PCs) and mobile telephones—
with specific functions. This situation is making it
difficult to realize increases in the value of production
and creating a severe operating environment.
In 2010, economic stimulation measures
implemented in 2009 by governments around the
world are expected to steadily bear fruit, taking the
situation from crisis to recovery. Expectations are that
measures to spur demand in America and Europe will
turn around these economies, while in emerging
markets strong demand is foreseen in China and other
countries. These factors are expected to fuel a slight
recovery in the electronics and IT industries, though
lingering uncertainty will keep the level of this
recovery well below the peak of 2007. On the other
hand, the expanding range of IT equipment
applications worldwide should lead to a recovery in
demand centered on display devices and
semiconductors, sustaining an increase in global
production by the industries.
Production by the Global Electronics and IT Industries
(¥100 million; % change year-on-year (YoY))
2,364,922
-5%
237,967
-8%
2,234,979
-15%
217,823
333,699
-9%
-13%
304,640
-17%
-5%
2,004,359
1%
191,537
AV equipment
5%
264,896
Communications equipment
380,167
Computers & information
terminals
4%
9%
101,066
Other electronic equipment
165,691
25%
12%
106,097
Electronic components
Display devices
233,559
Semiconductors
IT solution services
188,953
251,458
463,852
442,810
134,073
-9%
223,430
-9%
122,913
Production by the global
electronics and IT industries
5%
1,902,887
-10%
-14%
300,924
121,548
203,305
110,557
257,721
-17%
3%
368,641
-20%
-25%
-23%
-19%
96,762
152,142
84,873
208,208
-4%
5%
2%
548,064
576,575
551,850
561,346
2007
(Results)
2008
(Results)
2009
(Estimates)
2010
(Forecasts)
2
2010 PRODUCTION FORECASTS FOR THE GLOBAL ELECTRONICS AND INFORMATION TECHNOLOGY INDUSTRIES
FORECASTS OF GLOBAL PRODUCTION BY JAPANESE COMPANIES
Global production by Japanese electronics and IT companies is estimated to decline 19%
in 2009, to ¥38.7 trillion. However, an increase of 5% is forecast in 2010, to ¥40.4 trillion.
Production by Japanese electronics and IT companies accounted for 20% of the global
total in 2009, the majority share by country, and while these companies are facing
increasing global competition, they are seen improving results by focusing on their
strengths in high-value-added and environmentally friendly products.
Global production by Japan’s electronics and IT
industries, including overseas production, is
estimated to decline 19% in 2009, to ¥38.7 trillion.
Of this total, global production of electronics by
Japanese companies is expected to decrease 21%,
to ¥33.2 trillion.
Japan’s electronics and IT industries are
maintaining their global competitiveness and a
large market share, but the worldwide economic
slowdown and the rapid rise in the value of the yen
against other currencies are impacting profitability.
In addition, Japanese companies specializing in
providing high-performance, high-value-added
products are losing overseas market share to other
Asian companies with low-priced products offering
specific functions. Production of electronic
components and semiconductors has also dropped
markedly in line with reduced demand for
electronic equipment and inventory adjustments.
In 2010, global production by the Japanese
electronics and IT industries (including offshore
production), as well as by the Japanese electronics
industry alone, are forecast to expand 5% but end
well below the peak levels of 2007. Japanese
companies will continue to face a difficult
operating environment, but demand for highperformance, high-value-added, high-precision and
energy-efficient products, particularly in Japan, are
seen increasing demand for display devices and
semiconductors. Furthermore, in the areas of
computers, information terminals and IT solution
services, demand is forecast for new services
related to corporate social responsibility, including
support for global activities and environmental
measures.
In 2009, the product segments for which
Japanese companies maintained the highest market
share continued to center on AV equipment and
electronic components, specifically image projection
equipment (89%), video recording and playback
equipment (61%), image scanners/OCR (53%), car
AV communications equipment (47%), flat-panel
TVs (42%) and electronic components (40%).
Global Production by Japanese Electronics and IT Companies
(¥100 million; % change YoY)
514,573
-7%
476,762
96,582
-1%
-19%
95,766
51,399
5%
-13%
-17%
-5%
-16%
-13%
96,365
29,215
63,870
56,347
2007
(Results)
-4%
-10%
2%
Global production by Japanese
electronics and IT companies
84,120
AV equipment
35,735
Communications equipment
71,706
Computers & information
terminals
20,960
Other electronic equipment
66,393
Electronic components
25,600
Display devices
45,259
Semiconductors
54,340
IT solution services
83,567
-18%
86,276
30,086
404,113
1%
42,663
90,709
386,536
-19%
34,784
3%
2%
25,179
-20%
84,213
-28%
70,057
20,078
4%
9%
60,996
27,993
57,220
57,452
2008
(Results)
-24%
-27%
21,385
41,510
-6%
54,159
2009
(Estimates)
20%
9%
0%
2010
(Forecasts)
4
2010 PRODUCTION FORECASTS FOR THE GLOBAL ELECTRONICS AND INFORMATION TECHNOLOGY INDUSTRIES
FORECASTS OF DOMESTIC PRODUCTION BY THE JAPANESE
ELECTRONICS INDUSTRY
Domestic production by the Japanese electronics industry is estimated to decline 25% in
2009, to ¥14.0 trillion, marking the third consecutive year-on-year decline. The primary
factors in this estimate are rapidly decreasing exports—the result of the high value of the
yen and adjustments of inventories outside Japan—and falling demand for mobile phones
in Japan. In 2010, increased demand for AV equipment such as flat-panel TVs and
expanded production of electronic components and semiconductors in line with increased
demand for electronics around the world are forecast to sustain a 6% rise in domestic
production, to ¥14.9 trillion.
The Japanese economy saw a major drop in
exports in 2009, caused by the rapid global
economic slowdown. In addition, the rapid rise in
the value of the yen constricted the profits of
Japanese companies, leading to reduced capital
spending and investments in IT. Worsening
employment and personal income environments
have also placed the domestic economy in a
difficult situation. Nevertheless, improvement is
being seen in global financial markets, sustaining
the trend toward recovery.
In this environment, domestic production by the
electronics and IT industries is estimated to drop
25% in 2009, to ¥14.0 trillion. Domestic
production of mobile phones (down 24%) was hit
by the introduction of new sales policies that have
lengthened the product replacement cycle.
Domestic production of semiconductors (down
28%), electronic components (down 28%) and
display devices (down 27%) was severely
impacted by inventory adjustments amidst
uncertainty about the future of the global economy.
The forecast for 2010 is that domestic production
will increase 6%, to ¥14.9 trillion, the first year-onyear rise in four years. While a further shift to
offshore production is foreseen as a result of price
competition, replacement demand is anticipated to
drive sales of new TVs in advance of the full-scale
shift to terrestrial digital TV broadcasting in 2010,
and increased production of electronic components
and devices is expected around the world as the
global electronics market recovers.
In 2009, Japanese electronics and IT companies
manufactured 42% of their products in Japan, and
strong domestic production should continue for
products offering high reliability and quality, such
as semiconductors (76% of which are produced in
Japan), display devices (76%), electric measuring
instrumentation (71%) and server/storage equipment
(71%).
Domestic Production by the Japanese Electronics Industry
(¥100 million; % change YoY)
201,269
-8%
27,187
2%
28,133
-10%
185,720
-25%
27,624
25,368
21,859
-9%
19,821
19,625
-19%
-20%
-26%
15,850
-11%
34,629
-17%
5%
21,926
2007
(Results)
23,709
AV equipment
0%
20,209
Communications equipment
-2%
14,324
5%
12,630
Computers & information
terminals
Other electronic equipment
9%
24,212
Electronic components
19%
19,163
Display devices
31,649
34,298
Semiconductors
2009
(Estimates)
2010
(Forecasts)
20,304
12,077
22,282
-27%
-10%
48,926
3%
23,060
14,672
-28%
20,912
148,545
-24%
30,914
16,090
44,217
2008
(Results)
Domestic production by the
Japanese electronics industry
6%
140,134
-28%
8%
6