Federation of Asian Chemical Societies (FACS)

  Last updated on 14 June, 2001      

Vision for Electronic and Information Industry in 2010, Japan     

Compiled by: 
Committee for Study of Long-Term Perspective of Electronic Industry, 
Japan Electronic Industry Development Association (JEIDA)

Introduction

Since inception in 1967, JEIDA has been compiling about every five years perspectives of the Japanese electronic industry 10 to 20 years ahead. Five years have already passed since JEIDA compiled its previous report in 1994 and updating of the contents of it has become necessary. As its 1999 project, JEIDA compiled a long-term perspective of the electronic industry in Japan.

This article is an abridged edition of "Vision for Electronic and Information Industry in 2010", which was compiled last year.

1. Overall prospects

The global demand for electronics products (electronic devices, electronic components, information software and services) will increase by more than 7% per year on the average during 2000-2010 (Fig.-1) and will reach 3.4 trillion in 2010, doubling in ten years (Table-1&2). Among them, the global demand for electronic devices will increase 4% or more annually on the average. During the same period, the global GDP will increase 3% per year .

According to the trend analysis, the demand for electronic devices exceeds GDP by 1%. The demand has been increasing 7% annually on the average between 1990 and 2000, doubling in ten years.

2. Remarkable trends 

1. A firm demand for AV equipment due to digitization
2. Big growth in demands for telecommunication equipment and computers due to IT revolution
3. Large expansion of demand for electronic devices due to increase of demand for electronics equipment and increase of the input coefficient.
4. Shift from hardware to system solutions 

3. Trends by item

The growth rates of demand for electronic devices will be relatively high in Asian countries where high economic growth is expected, however, high growth is not expected in Japan and the European countries.

(1) Trends in Japan
In Japan, the demand for electronic devices decreased 1.1% per year on the average during the first half of 90's, but increased 1.9% annually on the average in the second half. Production was affected by the shifting of production sites to overseas, especially in production of AV equipment in the second half of the 90's. The increase in the production of electronic devices was at a double-digit level in the first half of the 90's, but became negative in the second half due to bad market conditions. It rapidly recovered toward 2000. In the 2000's, a firm demand is expected since alternation of generations of products such as digital AV equipment will promote replacement demand. For telecommunication equipment and computers, a high growth rate is expected due to the continuing IT revolution. A high growth rate is expected for production of electronic components.

(2) AV equipment
In advanced countries, consumer products will have added values due to digitization and networking, which will lead to a firm demand. In Asian countries, purchasing power will increase because of the economic growth, which will expand demand for consumer products such as TV and VCR.

(3) Telecommunication equipment
The IT revolution in the U.S. will have a ripple effect on Japan and the European countries. Therefore, demand in Japan and the European countries will increase 3-4% annually on the average in the 2000's. In the U.S., brisk demand for telecommunication equipment is expected in the 2000's on the back of the 90's. This is because of an increase of the use of electronic commerce and multimedia communication services.

① Cable communication equipment 
In all the countries, demands for network equipment will expand as a result of the expanded use of the Internet.

② Radio communication equipment
During the first half of 2000's, ground wave digital broadcast will become commercially practical all over the world. Therefore, expansion of capital investment is expected for transmission and relay systems related to digital broadcasting. Around 2001, the next-generation cellular phones (IMT-2000) which allow high-speed data transmission will be introduced to the market. This will fuel replacement demand. The highway toll collection system (ETC) will become commercially practical and the traffic information communication service will be widespread, which will accelerate investment on the infrastructure.

(4) Computer
The IT revolution, the impetus for the American economy, will have a ripple effect on countries all over the world, and the growth rate of computer demand will exceed the economic growth rate in those countries. Due to downsizing and cost reduction, the demand for computers will increase on quantity basis. As computers are widespread in companies and households, networking will become popular, then the number of users of the internet and intranet will exponentially increase. Along with networking of computers, the needs for software services will increase. For example, private users' needs for various information services and electronic commerce via internet will expand. For corporate users, expansion of information sharing systems, supply chain management and net business is expected.

① Computer
As the internet becomes popular, demand for network servers and network equipment will increase. Performance of PC will be improved dramatically, and PC will penetrate into the workstation and middle-size computer markets.

② Peripheral devices
Along with the expansion of demand for computers, the demand for peripheral devices will increase. A further increase of the production amount in Asia, which is a major production site in the world, is expected.

(5) Business machines

The global demand for business machines in the 90's was steady, decreasing 0.1% annually on the average in dollar value basis. Most of business machines are copiers. By area, demand was steady in Japan, the U.S. and European countries. In the rapidly developing Asian countries, the growth rate was 1% per year on the average.For business machines, a large expansion in demand is not expected because of product trends such as 
① combination of copier and fax machine, 
② decrease in demand for fax machines due to widespread use of e-mail and 
③ decrease in demand for word processors due to improved availability of PCs. However, since stable demand is expected regardless of the business trend, the global demand in the mid- or long term will increase by around 1% per year on the value basis.

(6) Measuring instruments

In the 90's, the global demand for measuring instruments has shown firm increase. By area, expansion of demands was observed in the U.S. and Asia. On the other hand, demand in Japan was sluggish. In many countries, a high correlation was observed between GDP and the domestic demand for measuring instruments, but it is not so in Japan, the U.K., France, and Germany. One of the reasons might be the shifting of production sites to overseas.

In the mid- or long term, expansion of demands is expected in the Asian countries. In the 2000's, the Asian countries will develop as production sites and an expansion of demand for measuring instruments is also expected in the area.

(7) Electronic components and devices

① Components
The global demand for general electronic components in the 90's increased 4.9% annually on the average on the value basis. Along with the expansion of production of electronic devices in Asia, a large increase in demand for general electronic components is expected.

② Devices
The global demand for electronic devices in the 90's increased 10.8% per year on the average on the value basis. The demand in Japan decreased after reaching a peak in 1995, but there has been an increasing trend in other areas. Along with the expansion of production of electronic devices in Asia, a large increase in the demand for electronic devices is expected.

As the global demand for telecommunication equipment and computers expands, the production of electronic devices will increase. For semiconductor devices, needs for system-on-chip products incorporating a processor, memory and control circuit and custom devices with limited functions for specific applications will increase.

(8) Information software and services

① Information software
The level of demand in the U.S. was about 1.3 times higher than in Japan in 1990. It increases to about 3.2 times in 2000. The cause for the widened gap was that the U.S. companies have actively invested on IT since the second half of the 90's whereas Japanese companies have held back investment on IT due to the recession. Performance of Japanese companies will improve in the 2000's due to an economic recovery and capital investment for IT will expand to promote the IT revolution where the U.S. companies have a head start.

② Information services
The level of demands in the U.S. was about 2.5 times higher than in Japan in 1990. It will increase to become about 5.5 times in 2000. The reason for this seems to be similar to the one for information systems and software.


Conclusion
Though the demand and production of electronic devices and components during 2000 to 2010 in Japan will not grow so rapidly, those in Asia are expected to expand well above the world average because of the economical growth in the region and shift of the production from Japan and Western countries.

Table-1 Demand Forecasting by Item in the World (Unit: Billion Dollars, %)