The third-largest electronics manufacturing industry in the world belongs to Japan. It is also the fourth-largest export market for semiconductor manufacturing equipment for the United States. Much of the growth experienced by the industry has been fueled by brands like Reneses, Sony, and Toshiba. Bain Capital agreed to purchase Toshiba’s chip unit in June 2018 for $18 billion.
Manufacturing equipment sales for the Japanese semiconductor industry reached $6.49 billion in 2017. That was a 40% increase from 2016 figures, again fueled by Toshiba’s investments into the second. By 2020, this sector is expected to top $9.5 billion for the first time.
In recent years, the semiconductor industry in Japan has seen a reduction on a dollar basis in consumption, but has grown when evaluated on a yen basis. The exchange rate between the dollar and the yen creates an advantage for electronic equipment producers in the country, which gives the semiconductor industry a needed boost.
Important Japan Semiconductor Industry Statistics
#1. Semiconductor sales in Japan average about $3 billion per month. In 2017, the industry earned revenues of more than $36.3 billion. (Statista)
#2. In 2017, Japan controlled a 13% share of the regional equipment and materials market for the global semiconductor industry. In 2003, Japan controlled a 26% share of the regional market. (SEMI)
#3. Japan’s share of the world’s semiconductor manufacturing equipment market reached 30% in 2015. They are second in this sector to the United States, which controls a 44% market share of the sector. (U.S Department of Commerce)
#4. In most markets, firms based in the U.S. control a 50% or greater share of the semiconductor market. In Japan, U.S. firms hold a 35.8% share of the market. (U.S Department of Commerce)
#5. Quarterly billings for the Japanese semiconductor industry ranked above Taiwan in Q2 2017, experiencing a 47% growth in billings from the year before. Taiwan saw a 21% decrease in their billings over the same time period. (SEAJ)
#6. In April 2018, the global semiconductor industry experienced its 19th straight month of growth in year-over-year sales increases. Although the Americas saw a 37% increase, Japan still experienced a 15.5% increase in these figures. (Electronics Weekly)
#7. In 1990, 60% of the world’s top semiconductor companies were located in Japan. In 2015, only Toshiba remained in the Top 10 for global dominance. (EE Times)
#8. The Japanese market represented 7% of total sales within the semiconductor industry in 2015. As recently as 2010, the Japan semiconductor industry represented 14% of the global market. (EE Times)
#9. One of the leading makers of semiconductor machinery in Japan, Disco, saw profits soar 90% at the beginning of 2018 to reach $361 million. The company topped projects by more than 4 billion yen on sales rising over 30%. (Nikkei Asian Review)
#10. Many of the manufacturers who are active in the Japanese semiconductor industry do business overseas. As much as 80% of the sales which are achieved by the industry involve the export market. (Nikkei Asian Review)
#11. The global semiconductor industry grew by 21% in 2017, reaching a total value of $408.6 billion. Chipmaking equipment sales from Japan rose 26% at the same time, topping 1.97 trillion yen. (Nikkei Asian Review)
#12. In 2015, Japan held an 11% share of the global market for semiconductor production and a 30% share of the global market for manufacturing equipment production within the industry. (SEAJ)
#13. The U.S., Japan, and the Netherlands control over 90% of the $37 billion global market for semiconductor manufacturing equipment. (SEAJ)
#14. Japan is also part of the 5-region conglomerate which is responsible for 84% of the global sales of semiconductor manufacturing equipment. Taiwan, China, Korea, and the U.S. are also represented. (SEMI)
Japan Semiconductor Industry Trends and Analysis
Although the manufacturing of electronics components is on the rise, the semiconductor industry in Japan (and the world) is beginning to see year-over-year decreases in sales. Even when there are double-digit percentage gains in fab construction starts, a weak economy within mature markets causes the industry to be flat.
Large-scale investments for 300mm wafer lines by Micron, Sony, and Toshiba are providing structure to the semi-conductor industry in Japan. New investments, such as the one from Bain Capital to purchase the chip unit from Toshiba, are bringing fresh ideas to the industry. Micron recently invested $20 million to improve productivity.
What is holding the industry back are three things: a lack of overall innovation in the electronics sector, a lack of interest in the mature markets, and an inability to afford products in the developing world. If any of these three issues can be solved, then the Japan semiconductor industry will see growth. If not, then the next few years will continue to see flat or decreasing revenue results.