The Electrical Industry in Japan April 24, 2013 Japanese Electrical Electronic and Information Union

Transcription

1 Ver.1.3 The Electrical Industry in Japan April 24, 213

2 State of the Electrical Industry (1) Position of the electrical industry in Japan (FY29) The machine industry s share of total domestic production Metalworking industry 1.9 trillion yen (2.2%) Total 483 trillion yen Machine industry 35.5 yen (7.4%) Employed workers in Japan Metalworking industry 1.14 million people (2.3%) Total million people Machine industry 4.14 million people (6.6%) Information service industry 1.64 million people (2.6%) Breakdown of machine industry Precision machinery 1.3 trillion yen (3.7%) Breakdown of machine industry General machinery 8.5 trillion yen (23.9%) All-purpose, production, business machinery 1.43 million people (34.5%) Total 4.14 million people Electrical machinery 1.67 million people (4.3%) Source: Prefectural economic accounts (Cabinet Office) Labour Force Survey (Ministry of Internal Transportation equipment Affairs and Communications) 12.6 trillion yen (35.3%) Total 35.5 trillion Electrical machinery 13.2 trillion yen (37.%) Transportation equipment 1.4 million people (25.1%) Looking at FY29, the electrical industry accounts for 2.7% of domestic GDP (electrical and electronics sector only) and 5.3% of domestic employment (2.7% for electrical and electronics sector, 2.6% for information service sector). 2

3 (2) Trends in Electrical Industry Employment Numbers State of the Electrical Industry 4 3 (x1, people) Trends in number of electrical industry workers (FY/no. of general regular employees) Electrical machinery, equipment and supplies Information and communication electronics equipment Electronic parts and devices Information services/internet-related FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY21 FY211 Note: FY211 data excludes Iwate, Miyagi and Fukushima Prefectures (these three account for less than 1% of surveyed districts nationwide). Source: Labour Force Survey (Ministry of Internal Affairs and Communications) In FY211 the number of people (regular employees) working in the electrical industry (electrical machinery equipment and supplies manufacturing, information and communication electronics equipment manufacturing, electronic parts, device manufacturing and information services industries) totaled 2.76 million (a 1.1% year-on-year increase). Looking at medium-term employment trends, there is a declining trend for electrical machinery equipment and supplies and an increasing trend for information services. 3

4 (3) Electrical Industry Domestic Production and Sales State of the Electrical Industry (trillion yen) FY1989 FY199 FY1991 FY1992 Trends in Domestic Output of Electrics and Electronics Industries (FY) FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2 Information Electrical communication industry equipment FY21 FY22 FY23 FY24 FY25 FY26 FY FY28 Electronic parts and devices FY29 FY21 FY Source: Report on Indices of Production (Ministry of Economy, Trade and Industry) (trillion yen) FY1989 Software development, program production FY199 FY1991 FY1992 Systems and other management contracts FY1993 FY1994 Trends in Sales for Information Services Industry (FY) FY1995 Others Source: Survey of Selected Service Industries (Ministry of Economy, Trade and Industry) FY1996 FY1997 FY1998 FY1999 FY2 The post-fy28 decline in production continues for information and communication equipment and electronic parts and devices FY FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY21 FY211

5 6 4 2 (2) (4) (6) Performance Trends and Forecasts (consolidated) for Companies with Central Unions in Spring Offensive (trillion yen) (1 billion yen) FY Sales (left axis) Operating profit (right axis) Current profit (right axis) FY23 FY24 FY25 FY26 FY Note: US GAAP-adjusted operating profit is calculated as profit before taxes. FY212 projections (p) are current as of February 13, 213. Source: Company financial statements FY28 FY State of the Electrical Industry (4) Electrical Industry Performance and Management Indicators In FY211, sales declined 3.7% year-on-year to trillion yen and operating profit fell nearly 3% year-on-year. As for profits and losses for this term, the slump in semiconductor and flat-screen TV businesses along with large-scale corporate restructuring resulted in a loss of billion yen. With continued corporate restructuring expenditures expected, 212 losses are projected to top 211 losses at around 952 billion yen. FY21 FY FY212p -9.5 (1) (2) (3) Central unions in Spring Offensive: Hitachi, Panasonic, Toshiba, Fujitsu, Mitsubishi Electric, NEC, Fuji Electric, Sharp, Oki, Pioneer, Yaskawa Electric, Meidensha (Panasonic Electric Works included until FY23; Sanyo included until FY28) 5

6 State of the Electrical Industry (5) Electrical Industry Performance and Management Indicators (2) (%) FY22 Profit Margin on Sales for Companies with Central Unions in Spring Offensive (consolidated) Operating profit margin 営業利益率 Current profit 当期利益率 margin FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY21 FY211 FY212p Note: US GAAP-adjusted operating profit is calculated as profit before taxes. Source: Company financial statements Over the last 1 years, operating profit margin across the electrical industry in Japan has trended in the 2-3% range. Current income margins recovered in FY29 and 21 because of restructuring carried out in FY28. However, due to the Great East Japan Earthquake, the huge yen appreciation, and the slump in TV and semiconductor production, current profit margins have begun to decline again since

7 State of the Electrical Industry (6) Electrical Industry Imports/Exports (trillion yen) FY FY26 Trends in electrical and electronics industry import and export totals FY27 <Exports> FY FY29 Source: Ministry of Finance Trade Statistics FY FY (trillion yen) FY25 Electrical machinery FY26 <Imports> Information/communicatio ns equipment FY27 FY FY29 Electronic parts/devices FY211 exports in the electrical and electronics industry totaled trillion yen (a 9.5% year-on-year decrease) with a drop for information/communications equipment and electronic parts/devices, due to such factors as the slowdown in emerging economies influenced by monetary tightening, indirect effects from the European recession caused by the sovereign debt crisis, the worldwide downturn in informationrelated demand, and lagging international competitiveness due to the high yen appreciation. Imports totaled trillion yen (a 2.4% year-on-year decrease) with some increase in products related to disaster recovery efforts. 7 FY21 FY211

8 State of the Electrical Industry (7) Trends in Electrical Industry International Sales Ratios (trillion yen) FY FY1995 FY1996 FY1997 FY1998 International sales ratios (consolidated) 海外売上高 International sales ( 左軸 (left axis) ) 国内売上高 Domestic sales (left ( 左軸 axis) ) 海外売上高比率 ( 右軸 ) International sales ratio (right axis) FY1999 FY2 たて棒グラフエリア FY21 FY22 Source: Produced by JEIU from company press releases FY23 As a long term trend, international sales have comprised an increasingly large portion of sales for electrical companies. 211 figures show that international sales have overtaken sales within Japan at Toshiba (54.5%), Sharp (51.9%), and Yaskawa Electric (53.4%). Overall the international sales ratio is 41.6%. FY24 FY25 FY26 FY27 FY28 FY29 FY21 FY FY212 (%)

9 (8) Challenges for the Electrical Industry in FY212 (1) (1) Trends in semiconductor business State of the Electrical Industry Semiconductor production indices (seasonally adjusted) 2 25=1 Nov Source: Indices of Industrial Production (Ministry of Economy, Trade and Industry) Semiconductor inventory-sales ratio indices (seasonally adjusted) 4 25=1 35 Nov /4 5/1 6/4 6/1 7/4 7/1 8/4 8/1 9/4 9/1 1/4 1/1 11/4 11/1 12/4 12/1 13/4 Note: Semiconductor = microcontroller + logic + memory + CCD Periods of production increase and steady inventory Periods of steady production and inventory increase Periods of production decline and steady inventory Affected by the downturn in demand for information-related equipment following the global recession and the drop in prices due to large supply of LCD panels and other electronic parts and devices from emerging countries, the slump in semiconductor business continues. 9

10 State of the Electrical Industry (8) Challenges for the Electrical Industry in FY212 (2) (2) Restructuring of TV business Shipment volume (flat-screen TVs) (x 1, units) Eco Point system (May 29-March 211) 9/4 9/9 1/2 1/7 1/12 11/5 Switch to digital terrestrial broadcasting (July 211 in all but 3 prefectures) 11/1 12/3 12/8 13/1 Source: Japan Electronics and Information Technology Industries Association (JEITA) 13/ /4 Eco Point system (May 29-March 211) 9/9 Consumer price index (TVs) 1/2 1/7 1/12 11/5 Switch to digital terrestrial broadcasting (July 211 in all but 3 prefectures) 11/1 12/3 12/8 13/1 Note: 25 = 1 Source: Ministry of Internal Affairs and Communications Statistics Bureau 13/6 During the Eco Point promotion period, TVs shipped about 4 million units (equivalent to 2-3 years demand). During this period, both TVs and related parts fell in price. Companies foresaw falling product prices and future demand trends and announced restructuring of their TV businesses one after another. 1

11 (8) Challenges for the Electrical Industry in FY212 (3) State of the Electrical Industry (3) Trends in energy prices Fossil fuel import totals 24' 2' 16' (x 1 million yen) ガス類 Gas Crude oil/ 原油 粗油 raw oil 石炭 Coal Post-March ' 1' 8' Unit prices for fossil fuel imports (yen) Post-March ' 8' 4' 6' 4' 2' 石炭 Coal (yen/t) ( 円 /t) 原油 粗油 Crude oil (yen/kl) ( 円 /kl) ガス Gas (LPG) (LPG)( (yen/t) 円 /t) ガス Gas (LNG) (LNG)( (yen/t) 円 /t) 1/4 1/6 1/8 1/1 1/12 11/2 11/4 11/6 11/8 11/1 11/12 12/2 12/4 12/6 12/8 12/1 12/12 13/2 13/4 13/6 Source: Trade Statistics (Ministry of Finance) 1/4 1/6 1/8 1/1 1/12 11/2 11/4 11/6 11/8 11/1 11/12 12/2 12/4 12/6 12/8 12/1 12/12 13/2 13/4 13/6 With the growing global demand for fuels, procurement costs are projected to increase over the long term. However, because of the future yen exchange rates and trends in overseas demand, the actual circumstances are unpredictable. Meanwhile, roughly 8% of Japan s crude oil and LPG imports pass through the Strait of Hormuz, so we must pay attention to the situation in the Middle East and North Africa. 11