Electronics Industry Overview
11, 01. 2004
Reorganization of the Japanese Semiconductor Industry Completed; Business Performance Recovers
According to the Ministry of Economy, Trade and Industry (METI), the FY2002 value of production from semiconductors, a field that is representative of the Japanese electronics industry, was 3 trillion 971.3 billion yen. The total number of people employed in the semiconductor industry was 175,000.
A Move toward Consolidated Production Also Seen in Areas Such as Flash Memory
Meanwhile, for semiconductors called system large-scale integration (LSI) which perform advanced processing, Hitachi and Mitsubishi Electric established a joint venture, Renesas Technology Corporation, in 2003. It is a major corporation that is among the world's top three companies in the semiconductor industry. NEC spun off its added-value semiconductor division, including that for system LSIs, into a separate company in 2002 and established NEC Electronics Corporation. Fujitsu, Toshiba, Sony Corporation and Matsushita Electric Industrial Co., Ltd. are manufacturing system LSIs within their internal business divisions. Furthermore, Fujitsu consolidated its flash memory (memory used in mobile phones, etc.) production with Advance Micro Devices, Inc. (AMD) of the U.S. and established FASL LLC as a joint venture of the two companies. Sony, Toshiba and America's IBM are currently jointly developing a next-generation microprocessor code-named Cell. Cell has superior image medium processing capabilities. The co-developers would like to design the Cell to outstrip, in image medium processing, the semiconductors for personal computers that are currently being provided by Intel Corporation. They plan to incorporate the Cell processor into digital consumer electronics such as flat-screen TVs and DVD recorders in order to enable ultra high-speed image processing.
Companies Launching Proactive Investments
The latest production lines of semiconductor of Renesas Technology Corporation
Japan's semiconductor industry lost ground to overseas competitors and remained stagnant for a long time. However, in addition to the fundamental business integrations that have been conducted in the industry, there has also been a sharp increase in demand for digital consumer electronics since around 2003, and business performance is recovering. Recovery is especially pronounced for DRAM (a type of computer memory), and in the case of DRAM manufacturer Elpida, the company achieved a listing on the stock exchange. Furthermore, companies are launching proactive investments. Elpida will be making capital investments totaling roughly between 450 billion and 500 billion yen in the several years beginning 2004.
Japanese Companies Strong in Fine Processing Technology
Japanese semiconductor manufacturers are capable of meeting such needs. They listen carefully to requirements, utilize their fine processing technology to the utmost and make exhaustive improvements. Semiconductors produced through such efforts are actively being used in mobile phones and other products. The development of semiconductors with even narrower circuit line width will be progressing. The narrower the width of the circuit line, the smaller semiconductors will be. For this reason, companies are in fierce competition with each other to develop such smaller chips. Japan has strength in such fine processing technology, and it is a general assumption that they will have an edge in future competition.
Heading Towards the Development of New Markets, Including Automotives
Meanwhile, Japanese semiconductor manufacturers are trying to open up new markets for themselves, such as in automotives, besides the consumer electronics field where there has traditionally been large demand. In recent years, a great amount of semiconductors are used to control automobile engines, wheels, etc. Renesas Technology and other companies see this as a favorable opportunity to expand their sales of automobile-use semiconductors. It is thought that there is an ample chance for Japanese manufacturers in this field because such products must be of a quality that is resistant to high temperatures. Furthermore, it looks as if there will be a future increase in demand for microscopic electronic parts. Hitachi developed the u-chip (mu-chip), an IC chip which, at is smallest, is only 0.3 mm square. Called IC tags, the attachment of such tags to various products makes it possible to get a grasp of the distribution history of the product.History
Parts Manufacturers Achieve Rapid Growth through the Spread of Television
Junk shops of DVD
The Japanese electronics industry was originally fueled by the popularity of radios and television sets. The demand for radios increased after the end of World War II, and the demand for color television sets rose sharply upon the Olympic Games held in Tokyo in 1964. Industries manufacturing electronic parts grew rapidly accordingly.
Japan Accounted for about a Quarter of the Global Market in the Mid-1990s
In the past, major Japanese electronic companies were involved in the semiconductor business, and they were competing against one another as in the age of rival warlords. In fact, Japanese companies were marking five of the ten top positions in the world, and the total sales of Japanese companies accounted for about one quarter of the global semiconductor market in the 1990s. However, they were hotly pursued by Asian companies, such as Samsung Electronics of Korea, and this business showed decline in Japan. Business mergers and withdrawal from this field continued one after another, and at present, the number of companies involved in semiconductors has become quite reduced.
Three Key Points towards the Future