Modest decline seen in Japanese CE production

Television Digest with Consumer Electronics, Jan 5, 1998

Decline of 2.7% in total 1998 Japanese CE production to 2.21 trillion yen (about $17 billion) would mark return to recent trend when production volume fell for 6 consecutive years. Rare exception was 1997, when Japanese CE output rose estimated 2.8% to 2.27 trillion yen on DV camcorder and MD ramp-up for Japan and Europe. Also contributing to 1997 increase were "recovery" in production volume of color TV sets in Japan and weaker yen, which resulted in rising export sales, EIAJ said.

EIAJ blamed projected 1998 CE production decline on slower "replacement demand" for products that "were mainstays in the past." However, EIAJ said, major anomaly in 1998 forecast is that while DVD demand is expect to grow, DVD products aren't yet included in production statistics released by Ministry of International Trade & Industry. As such, EIAJ said, "no corresponding figures" for DVD players are included in forecasts for 1998.

Despite 2.8% rise in CE production for 1997, increase was smallest among other major categories of industrial electronics and electronic components and devices, which rose estimated 10% and 7.6%, respectively. CE growth also paled in comparison with that of Japanese electronics production as whole, which increased 8.4% to 26.2 trillion yen.

Biggest 1997 CE increases in yen terms were estimated for car navigation systems (up 31.2% vs. 1996) and digital audio disc players, including MD (up 17%). Total video equipment production rose 3.8%, spurred by 5.1% increase in video cameras. Without DVD factored in, videodisc player production fell 3.4%. Overall, TV receivers rose 5.3% in yen terms for 1997, helped by 5.8% gain in color TVs, but hurt by 3.8% decline in LCD TVs. MD surge carried hi-fi amplifiers (up 26.1%) on its coattails, but speaker systems were left in doldrums, falling 12.4%.

Without invigorative effect of DVD, videodisc hardware production this year is projected to fall 38% in yen compared with only 3.4% decline estimated for 1997. Manufacture of digital audio disc players, including MD, will grow only 4% this year, in marked slowdown from 17% growth estimated for 1997. Besides videodisc hardware, biggest projected losers in yen terms this year are hi-fi tuners (down 20.4%), hi-fi speaker systems (down 11.6%), headphone cassette players (down 10.7%).

In terms of units produced, EIAJ estimated that biggest percentage rise in 1997 production was in car navigation systems, jumping 28.8% to 1,320,000, with biggest unit production declines in hi-fi tuners (down 47.4%) and LCD TVs (down 21.4%). For 1998, car navigation systems will have biggest projected rate of increase, rising 35% to 1,782,000 and biggest unit decline will be in videodisc players, projected to fall 37.6% to 786,000.

EIAJ said overall Japanese electronics production growth is expected to level off this year, rising only 3.5% to 27.14 trillion yen. Besides 2.7% decline projected in CE production to 2.21 trillion yen, manufacture of industrial electronics is expected to grow, but at slower pace than 10% increase estimated for 1997. As for electronic components and devices, EIAJ said production in that sector is expected to maintain solid growth rate, rising 6.4% to 11 trillion yen. Increased production of 64-Mb DRAM chips for Windows 98 introduction will offset yen and unit declines in "general electronic" components and LCDs, EIAJ said.