ELECTRONICS—based on JEITA survey

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Production of the global electronics industry is estimated to have increased 20% year on year to 181.4 trillion yen (US$1.8 trillion*) in 2013, led by rapid expansion of the smartphone and tablet markets. And production will rise a further 5% to 191.4 trillion yen in 2014—the third straight year of growth, as the world's appetite for mobile terminals continues to increase and demand for electronic devices and components trends upward underpinned by steady growth of the automotive market, according to an annual survey by the Japan Electronics and Information Technology Industries Association (JEITA)

*Original figures are in Japanese yen. The exchange rate is roughly US$1=100 yen.

While global electronics production has been on a vigorous upward trajectory, Japan's electronics production, including Japanese companies' production overseas, decreased in 2012, but resumed growth in 2013 with a 6% increase to 32.5 trillion yen and is expected to continue growing this year, rising 3% to 33.4 trillion yen.

The growth of Japanese companies' production overseas reflects their drive to lower costs, ameliorate the impact of exchange rate fluctuations, and enhance responsiveness to demand by locating production in or adjacent to major markets. Production in Japan has consequently trended downward, declining 3% to 11.4 trillion yen in 2013. However, this year, in view of the anticipated improvement of the Japanese economy, a 3% rise to 11.8 trillion yen is expected.

Japan looms large in electronic components: the value of global production in 2013 is estimated at 19.8 trillion yen, with Japan accounting for 38% of the total, though less than 1/3, 12%, of that was manufactured in Japan.

Japan still accounts for a large share, 37% worth 16.8 trillion yen, of global production of digital consumer electronics. In this category, however, the shift of production to regional markets is particularly marked: made-in-Japan products represented only 5% of global production in 2013.

Japanese manufacturers remain formidable contenders in certain product fields, with dominant shares of global production, but these markets tend to be relatively small. For example, of global production of video and digital cameras worth 1,226 billion yen in 2013, Japanese companies accounted for 89%, and for printers worth 136 billion yen, the figure was 68%.

Japanese manufacturers have a low profile in the mobile phone/smartphone business; of global production worth 25.6 trillion yen in 2013, they accounted for only about 6%.

Although Japan used to dominate the global semiconductor and display panel markets, in 2013 it accounted for 15% of global semiconductor production and 13% of global display panel production, according to JEITA.

SEMICONDUCTOR—based on WSTS survey

Japan's semiconductor market—that is, the sum of semiconductor sales in Japan by Japanese and overseas vendors—was worth US$34.8 billion, accounting for 11.4% of the global market, in 2013, according to a WSTS survey.

In 2013, sales in Japan dropped sharply, 15.2%, year on year, and a further 1.3% decline is forecast for 2014. But these decreases are largely attributable to the weakening of the yen against the dollar. On a yen basis, the picture is very different: a 3.7% increase in 2013, with 4% growth expected for 2014.

The yen reached unprecedented heights against the dollar in the period from 2009 to 2012, peaking at less than 80 yen to the dollar. For now, to the relief of many Japanese companies, the exchange rate seems to have stabilized at around 100 yen to the dollar. The weaker yen is a tailwind for many manufacturers and, along with the general improvement of the Japanese economy, domestic demand is expected to grow. WSTS forecasts that the Japanese semiconductor market will continue growing: 4% this year, 2% in 2015 and 3% in 2016 to 3,710 billion yen.

Related links:
2014 Production Forecasts for the Global Electronics and Information Technology Industries
WSTS Semiconductor Market Forecast Spring 2014