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Edition 01/2018
EPA and TPP 11, Japan will become open to foreign trade
On December 8 the EU and Japan announced the successful conclusion of the negotiations regarding the Economic Partnership Agreement (EPA). With regard to the apparent protectionist tendency of recent times, the signing of the EPA (Economic Partnership Agreement) between the EU and Japan has shown a political will for the free, fair and open foreign trade system worldwide. Therefore, in addition to the Japan-EU Strategic Partnership Agreement (SPA), this agreement not only serves to further deepen the economic relationship of both countries, but should also have some impact on shaping world trade in the future.
Approximately 11% of total Japanese exports go to the EU, making the EU one of the most important trading and investment partners for the Japanese economy. With the EPA agreement, the huge free trade zone will consist of a population of about 640 million, whose GDP corresponds to a world share of about 28% and a trade volume of about 37%.
Population (2016) GDP (2016) External trade (2016) (Export+Import)
Japan + EU = 8,6% Japan + EU = 28,4% Japan + EU = 37,2% Japan Japan EU Outside 1,7% Japan 3,9% 6,9% USA the EU 6,6% 4,3% 12,0%
EU Other Other 32,0 21,8 China 39,8% % % Within 18,5 the EU % 21,2% Other 68,6 China USA China USA % 14,9 24,7 11,6% 11,4% % %
(Source: Ministry of Foreign Affairs of Japan) Furthermore, on January 23 trade officials from eleven countries participating in the Trans-Pacific Strategic Economic Partnership Agreement (TPP), excluding the United States, held a meeting in Tokyo. The 11 members of the Trans-Pacific Partnership will sign a new pact without the United States on March 8 in Chile. TPP 11 will be taking effect in 2019 if domestic procedures go smoothly. It is an economic zone that accounts for 13% of the world's GDP scale and 6.7% of the world's population. U.S. President Donald Trump said on January 25 he would rejoin the Trans-Pacific Partnership trade deal, which he decided to exit back in January 2017, if "we made a much better deal than we had."
JAPAN Contact: Heiwa Hasegawa, Representative Telephone: +81 3 5276 6632 Fax: +81 3 5276 2455 E-mail: [email protected]
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444 2 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Current Economic Scenario
Machine tools: robust in 2017 and positive outlook for 2018, although labor shortage worsening In the early days of January, the major associations of engineering companies held a succession of information sessions at Tokyo hotels. All of the sectors reported strong economic performance. Last year’s high demand from China has carried into the new year, and there is healthy demand for capital expenditure on productivity improvements. In these circumstances, year-on-year growth in the range of 10%-20% was recorded. On the other hand, there was frequent mention of the increasingly severe labour shortage, underlining the need to accelerate the government’s ‘connected industry’ initiative.
A heightened sense of crisis caused by Japan’s (Photo source: VDMA Japan) successive years of low productivity is felt not only by officials of the Ministry of Economy, Trade and Industry (METI), but throughout industry. According to the Organisation for Economic Cooperation and Development (OECD), the value of GDP generated per hour in Japan in 2016 was $41.5. By comparison, one hour of labour in Germany generated $59.8. approximately 44% higher. Furthermore, Germany also had the shortest working year of any OECD country, with 1,364 hours; a stark contrast to Japan’s 1,713 hours. It is questionable whether Japan’s labour productivity can be increased as the Abe government proposes with its call for a ‘productivity revolution’ and ‘working revolution’ to redress the work-life balance.
International comparison of labor productivity per worker 1970 1975 1980 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Japan USA Germany France Canada England
Source: Japan Productivity Center
**The Japan Productivity Center announced on December 20, 2017 that one of hour of labour in 2016 generated $46 (¥4,954) of GDP, an increase of 1.2% over the previous year.
METI and EU; increased export support and expert advice METI and the EU have signed the European Partnership Agreement (EPA) which provides more support for small and medium enterprises to export to the EU. Small and medium enterprises entering the EU or expanding their product range may now receive support from attorneys, trade expert and other advisers.
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
3 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
The objective of the support is the 6,677 member companies registered as small or medium enterprises in the JETRO consortium of new exporters, in addition to the more than 1,000 companies who are expected to receive support under the Trans Pacific Partnership (TPP) for exporting to the member countries. The supplementary budget of ¥2 billion allocated in FY2017 is expected to be increased to provide support for an additional 1,000 companies exporting to the EU.
The consortium will receive support from JETRO (The Japan External Trade Organisation) and through chambers of commerce in the form of assistance with formulating overseas expansion plans, market research, provision of industry experts and veterans, on-site negotiations, etc. The EU has a more advanced legal structure than many Asian countries, which are members of the TPP. Without expert advice, it is difficult to comply with procedures for such measures as obtaining the CE safety mark, or with restrictions on retail land use, for example. METI will appoint approximately 500 such experts, and will also secure the services of former industry experts from major companies and consultants to support exports to the EU. (Nikkei Shimbun, 21.12.2017)
Tax reform in 2018 International competition to lower tax rates is becoming more severe as globalisation continues. Restricting domestic tax rates attracts foreign capital, leading to growth in the home country. Japan’s effective rate of corporate tax has fallen from 37% in FY 2013 to 29.97% in FY 2017, and is expected to fall further from its FY 2018 rate of 29.74%. In addition, a number of measures are being introduced to encourage capital expenditure on increased productivity.
■ Domestic investment (wages, capital expenditure) accelerating The government is urging businesses to raise wages by 3% and increase capital expenditure, as Japan achieves record high levels of corporate earnings. It is planned that companies that do this will have their corporate tax reduced to the OECD average of 25%. Companies that invest vigorously in IoT to improve productivity will have their corporate tax reduced further to 20%.
Applicable period： 3 years until end of 2020 2017 Income expansion promotion Tax reform in 2018 taxation (large enterprise)
A wage increase above a certain level and domestic capital investment A wage increase above a certain level ① Wage increase rate 3% or more ① Total amount of salary: more than a ② Domestic capital investment ＞ 90% of Requirement certain amount since 2012 depreciation expenses ② Total amount of salary > previous fiscal year > Strengthen support for companies which invest ③ Wage increase rate 2% or more actively in human resource (for example companies increased cost of education and training program)
15% of the incremental amount since from previous year (20% of corporate tax amount as 10% of the incremental amount of maximum) tax credit salary since 2012 (10% of corporate tax 20% for companies which invest actively in amount as maximum) human resource ( 20% of corporate tax as maximum)
Source: METI
■ Boost for investment by SMEs For new capital investment, a special provision will allow the tax on fixed assets to be reduced from one half to zero for the 2018-2020 financial years in the following cases.
① SME capital investment implemented in accordance with city, town or village planning ② Direct capital investment which directly achieves the target of the productivity revolution (investment in equipment which raises average labour productivity by 3% or more) ③ Capital investment leading directly to increased profitability
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
4 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Reduction of corporate effective tax rate and international level
OECD average 24.78% Asien average 21,7%*
Source: METI
■ Stronger structure for IoT capital investment (Connected Industries tax treatment)
A special depreciation of 30% or a tax deduction of 3% (or 5% if accompanied by a wage increase) will apply to the purchase of certain systems, sensors, robotics and other capital investment related to cyber and data security and productivity improvements.
Any company seeking to apply this treatment must submit the investment plans to the Ministry and obtain approval. The provision is available until the end of 2020. To be eligible, investments must have as their objective a 2% or higher yearly increase in productivity or a 15% or higher yearly return on investment.
■ Promoting faster and larger corporate re-structuring (M&A) pace and scale increasing Measures are being prepared to defer tax on share transfers on M&A activity in Europe and North America in order to help companies quicken and enlarge their portfolio restructuring to adapt them for Industrie 4.0.
Type of consideration by large TOB (Take Over Bid) （Top 20 large TOB in each country） 100%
90% 25% 35% 80% 45% 5% 70% 65% 60% 20% 50% 100% 40% 35% 70% 30% 15% 20% 45% 10% 20% 20% 0% Japan USA England France Germany
Cash Stock Cash&Stock Source: METI
Additional measures will support SMEs in improving productivity and securing energy supplies. SMEs in particular have an ageing corporate leadership. Despite the fact that over the next ten years, 2,450,000 CEOs at SMEs will reach 70 years of age (retirement age), only half of them have made succession plans. There is concern that if nothing is done to address the current situation, rising corporate failures among SMEs will seriously damage the local economy. There is a need to improve productivity and promote corporate restructuring in SMEs.
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
5 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
SEMICON Japan 2017 - the largest scale since 2013 The 41th SEMICON 2017 exhibition of semiconductor manufacturing equipment and materials was held at Tokyo Big Sight from 13th to 15th December 2017. Japan's semiconductor industry has been in a downturn for more than 10 years. This time the mindset was planned, the venue was relocated from Makuhari Messe to Tokyo Big Sight and held.
Production by the semiconductor industry increased by 20% to 30% compared to last year. Reflecting this booming semiconductor industry, the number of exhibitors was 752, the number of visitors was 67,613, and it was held on the largest scale since 2013.
In this SEMICON Japan 2017, the special exhibition "WORLD OF IOT" was established in the 2nd and 3rd Hall in the scale of 1.5 times compared to last year, and products and technologies that realize the IoT revolution leading the new demand of semiconductors gathered. Also, "all about DRONES" was held for the first time, and drone was taken up as an experience exhibition as one of the (Photo source: VDMA Japan) smart applications to drive demand for semiconductors.
The German Engineering Federation (VDMA) supported to set up a German Pavilion including an information center at SEMICON Japan. This time, 16 German exhibitors offer state-of-the-art manufacturing solutions, components, materials, software and services for the production of semiconductors. Also VDMA member companies like Dockweiler, Heidenhein, sentronics metrology and so on were exhibited independently.
NEPCON Japan 2018 From January 17th to 19th, 2018, Japan's largest exhibition on electronics technology "47th Nepon Japan" was held at Tokyo Big Sight. Wearable EXPO, Automotive World, RoboDEX, Smart Factory EXPO, etc. were also held simultaneously, 2,480 companies from around the world participated, and about 40 German companies also participated. At Automotive World, the latest technologies such as automatic driving, AI, EV / HEV, weight reduction technology etc. were exhibited and demon stellation was done.
A lot of VDMA member companies such as Heraeus, Deprag Schulz, Kraussmaffei Technologies, ODU, Balluff, Herrmann Ultraschalltechnik, Eplan Software & Services, Rittal, Festo, Phoenix Contact, Siemens, KUKA exhibited and introduced advanced technologies.
(Photo source: VDMA Japan)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
6 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Digitalisation in Japan -Quo Vadis
Standardisation of Big Data for industry; METI, MIC and 5 automotive sectors METI and the Ministry for Internal Affairs and Communications (MIC) will begin unifying their criteria in 2018 in order to spur development of new big data products and services for industry. Data will be formatted for the sectors where growth is expected, such as bio and auto-mobility. The measure will smooth collaboration beyond the factory gate, and lay a strong foundation for manufacturing in the data era.
While the ISO standards used by industry in big data development apply accuracy, consistency and reliability as a measure of quality, they paint with a rather broad brush. With so few detailed sector- specific standards, many different businesses are developing their own data. This is creating obstacles for companies in the supply chain and other joint enterprises.
METI is joining with other parties to establish a general foundation known as the Data Trading Alliance in 2018 to determine joint standards for five sectors including auto-mobility, bio, materials, and plant operation.
The ‘approvals data bank’ system established in FY2018 calls upon participating companies to observe certain requirements in handling data. The role of the bank is to aggregate the data owned by several companies and provide it in a form useful for product development. Companies also have the right to request the use of data owned government or public authorities.
METI and MIC plan to select 20 projects in 5 sectors for industrial data standardisation. It is proposed to use drones to collect essential information for the sectors, such as 3D mapping for auto-mobility and operating data on chemical plants. METI allocated supplementary funds of ¥2 billion in FY 2017 for system development costs in data standardisation and sharing in preparation for the start of the data bank system in FY 2018. (Nikkei Shimbun, 20.12.2017)
Robot industry SI group: METI and Japan Robot industry Association launch in 2018 Citing the lack of systems integration (SI) domestically and arguing the necessity for organisational change, the Japan Robot Association (JARA) and the Industrial Robot Systems Integrater (SIer) will merge in the spring of 2018. The planned name of the new body is the FA (Factory Automation) Robot Systems Integrater Association. A preparatory committee set up in November 2017 has already registered approximately 150 companies on the JARA SIer database. It is possible to search the list on Robo-NAVI（www.robo-navi.com) to locate SIer companies possessing the desired skills.
SI companies create systems that combine FA equipment with robotics, and are the key to unlocking growth in the market. Due to a shortage of skilled SI technicians who can conceive, design, build and assemble the systems for automation projects, it is not possible to keep up with demand for high-level robots. There is an urgent need to raise the level and the number of systems integraters. Three points were identified:
① Build an FA/Robotics industry network with SIer at the core ② Strengthen oversight of the SIer industry ③ Increase expertise in systems integration.
It is also important to correct the way business has (C) iStock / 106509181_gerenme always been done in the robotics/SI industry. Traditionally, robotics and SI companies have been largely technical sub-contractors to car-makers and manufacturing industry. There are examples of unfair practices such as changes in specification before delivery, which burden SI companies with costs. METI is drawing up a code of practice, known as ‘RIPS’ which will address this problem and define appropriate trading behaviour. With the new trade body in place, the drive to have the code widely adopted is to be stepped up.
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
7 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
IoT in manufacturing; Japan-German research group ‘ORIN’ to strengthen coordination of standards The Japan Robot Association and Germany’s Fraunhofer Institute are to begin joint research on IoT. The current ORiN standard and Fraunhofer’s newly developed standard will be mutually applicable, which will greatly increase the convenience to software developers and researchers in both institutions. Making it easier for robots from different manufacturers to work together will facilitate wide adoption of both institutes’ stadards. It is expected to take from 2018 to 2020 to establish the unified technology.
ORiN is a middleware standard from Japan that makes it possible to link factory automation (FA) devices of different makers with application software in a common way. It also works with the OPC-UA data transmission and reception protocol widely used in Europe and the United States, and is attracting a lot of attention as an IoT enabling technology, able to run factories with a diverse range of machinery easily. With these advantages in mind, Fraunhofer began a three-year development of the standard in 2016.
Collaboration will start in earnest when the Japan Robot Industry Association and the Fraunhofer exchange a memorandum of agreement in February 2018. The parties are to demonstrate that the standard produced on either party’s system can be easily operated by the other. Currently the ORiN council, a section of the Japan Robot Industry Association, is developing the next generation ORiN 3. On the Fraunhofer side, a single project development team has been set up to handle the standard and coordination.
If the institutes succeed in mutually operating their standards, user convenience will be enhanced and it will also simplify software development in both institutes. Adequate software will also lead to wider adoption of the standard. (Nikkan Kogyo Shimbun, 18.01.2018)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
8 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Industry Scenario
Automobile Industry
The Yano Research Institute of Research forecasts that the domestic market for connected cars will grow from ¥398 billion in FY2016 to ¥2 trillion in FY2025. Connected cars transform vehicles into mobile information hubs, using mounted sensors to gather and analyse information on the cloud while in motion. In FY2016 the domestic market for connected cars was divided into ¥71.2 billion (B2C), ¥180.5 billion (B2B), and ¥140.1 billion (R&D) for a total of ¥390 billion.
As the functions develop from car navigation systems as at present to self-driving cars, journey analysis for EVs and other areas beyond the gaze of the consumer, it is expected (C) iStock / 40649914_thornchai2 that the major growth will be in the B2B and research segments. Capital investment in research and in developing new services is forecast to increase the value of the domestic market for connected cars to ¥1 trillion in 2020. Furthermore, the increase in connected cars means that probe information and cloud ADAS use will grow, and the market for these services is forecast to be reach ¥2 trillion in 2025, a two- fold increase on the 2020 figure.
Development and forcast of the connected car related market in Japan billion yen
2.000,0
1.800,0 566,0 1.600,0 B2C B2B R&D 1.400,0
1.200,0
1.000,0 936,0 295,5 800,0 269,0 600,0 220,6 484,4 400,0 190,6 409,2 141,8 319,6 200,0 103,8 244,0 487,0 137,5 185,0 249,5 132,0 200,7 - 53,2 71,2 95,6 2015 2016 2017 2018 2019 2020 2025
(Source: Yano research Institute)
Toyota and Panasonic to Start Feasibility Study of Joint Automotive Prismatic Battery Business Toyota Motor Corporation and Panasonic Corporation announced on 13.December 2017 an agreement to begin studying the feasibility of a joint automotive prismatic battery business. This agreement is intended to address growing demand and expectations for electrified vehicles. In order to realize these objectives, Toyota and Panasonic target further advancements in automotive batteries, which are crucial technologies in electrified vehicles.
Toyota and Panasonic recognize the importance that further advancements in battery performance, price and safety, as well as a stable supply capacity, will have on encouraging further popularization of electrified vehicles. Both companies will consider details of the collaboration with the aim of achieving the best automotive prismatic battery in the industry and, ultimately, contributing to the popularization of Toyota's and other automakers' electrified vehicles.
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
9 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
The agreement shows the increasing need for automakers and battery companies to work together. Toyota recently unveiled plans, working with Mazda and Suzuki, to launch a new lineup of EVs starting in around 2020. Until recently, the company had been focused on building hybrid, plug-in hybrid and hydrogen cars exclusively. In October last year, Toyota established EV C. A. Spirit Co., Ltd., a new company of EV development with Mazda and Denso, in order to rework at the EV which is lagging behind other carmakers.
Toyota announced on December 18th last year that it will sell more than 10 models of electric vehicles (EV), including China and India, globally in the early 2020s. The Company is planning to start production of their luxury car brand "Lexus" compact car "CT" based EV and "RAV 4" based PHV, and from 2021 Toyota will produce a new sedan type fuel cell car (FCV).
And around 2030, there are plans to make electric vehicles more than 50% of all sales vehicles. Today, HV and PHV with annual sales volume of 1.47 million are supposed to be 4.5 million, EV and FCV are assumed to be 1 million units sold. (Nikkan Kogyo Shimbun, 13.12.2017, Pressrelease Panasonic)
Renault-Nissan-Mitsubishi launches $1 billion corporate venture capital fund Nissan Motor, Renault and Mitsubishi Motors will accelerate cooperation with venture companies in the development of next-generation cars. Three companies jointly established venture capital (VC) and announced on January 10 that it will invest up to 1 billion dollars (about ¥112 billion) in start-up companies with advanced technology in the field of automatic driving etc. in the next 5 years.
AlsoToyota Motor Corporation and BMW have set up VC, while competition for development of advanced technology and entry from different industries are accelerating, movements by automobile manufacturers to expand cooperation with outstanding startup companies are getting full-fledged.
Nissan and Renault hold 40% each, Mitsubishi owns 20% for VC. In the first year, 200 million dollars (about ¥22.4 billion) is planned to be invested in start-up companies and technology entrepreneurs in the fields of automatic operation, electricization, connected car (connected car) and artificial intelligence (AI). It will be implemented separately from the annual research and development expenditure of 3 consolidated companies of 8.5 billion Euro (about ¥1.14 trillion).
As the first investment destination, Nissan decided to invest in Aionic Materials, which is developing cobalt-free material for all solid-state batteries. The solid polymer electrolyte developed by the company is expected to be adopted for electric vehicles (EV) etc. as a material to enhance the performance and cost competitiveness of high density energy batteries. (Nikkan Kogyo Shimbun, 11.01.2018)
Nissan and 5 other companies test connected car communications technology Nissan and five other companies will conduct tests on communications technology for connected vehicles within the year. The communications protocol, ‘CellularV2X’, transmits data between other vehicles and pedestrians. The vehicle-mounted sensors are also expected to enhance safety. The tests aim at establishing the technical reliability of the system. Other participants in the test program are the Japan subsidiary of German firm Continental, the Swedish company Ericson, NTT Docomo, OKI Electric and the American company Qualcom Technologies. (Nikkan Kogyo Shimbun, 15.1.2018 )
Toyota to invest 40 bil. yen to modernize a plant in France Toyota Motor is set to invest about ¥40 billion in the French plant producing small car "Yaris (Japan name Vitz)", and will modernize the production facilities. The French plant began its operation in 2001 and has been manufacturing the current Yaris model. Having churned out some 238,000 units in 2016, the factory is Toyota's largest manufacturing base in Europe. In 2019, as well as introducing a new design philosophy "TNGA" to Yaris to fully improve, the production system will be prepared. In Europe, Toyota invested 240 million pounds (about 37 billion yen) also in the UK factory and announced it in March 2017 to renew it as TNGA equipment, and we will respond sequentially. (Nikkan Kyogyo Shimbun, 22.1.2018)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
10 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
GS Yuasa to set up Hungary plant for automotive lithium ion batteries GS Yuasa announced on January 11, that it will build a lithium-ion battery factory for in-vehicle use in Miskolc city, Hungary in 2019. The initial investment amount is about 4 billion yen. The Battery cells are supplied from Japan, assembled into a 12-volt lithium-ion battery for vehicle on site and supplied to European automobile manufacturers. Initial battery annual production capacity is 500,000 pieces. GS Yuasa will also consider local production of battery cells for electric vehicles (EV) in the future. (Nikkan Kogyo Shimbun, 12.1.2018)
Daikyo Nishikawa invests ¥12.5 billion in new headquarters in; concentrates research and other facilities Daikyo Nishikawa announced that its new corporate headquarters and factory in the city of Higashi Hiroshima, Higashi Prefecture, will be successively completed from December. The new headquarters represents an investment of c. ¥12.5 billion including buildings and land. It combines corporate offices with research and development. It is also includes a state-of-the-art manufacturing plant, which will raise productivity and equip the company for the next generation of manufacturing. The facility is built with energy efficiency in mind, using solar power and lowering CO2 emissions. (Pressrelease von Daikyo Nishikawa, Nikkan Kogyo Shimbun 23.1.2018)
Alpine to introduce AI in testing vehicle-mounted equipment; development and testing next financial year Alpine will introduce artificial intelligence (AI) in its inspection of vehicle-mounted equipment production within FY2018. Testing equipment and processes are being developed using IBM’s ‘Watson,’ It is expected to increase the efficiency of the checking process, currently conducted by technicians carrying out external visual checks, and lead to higher quality. This is the company’s first adoption of AI on a production site. Initially it will be used only in Japan but later expansion to the company’s overseas plants is planned. In the future it will conduct inspection of 100 vehicle fittings.
AI compatible visual inspection is being introduced at Alpine’s subsidiary company, Alpine Manufacturing Onocho (based at Onocho, Fukushima Prefecture), which manufactures vehicle- mounted equipment, using an AI function platform based on IBM’s cloud services. (Nikkan Kogyo Shimbun 25.12.2017)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
11 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Electronics
Domestic shipment value of white goods home appliances, upgraded replacement demand underpinned – JEMA The Japan Electrical Manufacturers' Association (JEMA) announced on the 24th that the domestic shipment value of white goods in 2017 increased by 2. 0% from the previous year to ¥2,034.79 billion. The influence of summer weather irregularity was seen in some areas, but the shipment value of white goods was supported by stable replacement demand.
The reason for the highest shipment value since 1997 is the rise in unit sales price. Manufacturers are continuously introducing home appliances with high added value and high price such as air conditioners for cold districts that improved heating performance, large capacity washing machines that can be washed together at weekends, and vacuum cleaners that also serve as futon cleaners. Popularity is growing, especially for consumers who want to reduce the time and effort of housekeeping as much as possible.
Such appliances are increasingly popular, particularly among consumers who want to spend less time and effort on housework. By product segment, air-conditioning units were up by 6.2% from the previous year, to ¥723 billion; washing machines were up 2% to ¥327 billion. (JEMA 24.01.2018)
Domestic shipment value of consumer electronics equipment decreased by 1.8% from the previous year - JEITA Domestic shipment value of consumer electronics equipment in 2017 announced on 24th by the Electronic Information Technology Industry Association (JEITA) was 1.8 trillion yen, down 1.8% from the previous year. By category, video equipment sales declined 3.9% to 622.5 billion yen, audio-related equipment decreased by 2.4% to 92.3 billion yen, and car AVC equipment increased 0.6% to 572.0 billion yen. Shipment of video equipment such as the main TV was not good.
Among them, products supporting high-resolution "4K" increased by 22.5% to 1.49 million, while products supporting "hybrid cast" that integrated television broadcasting and communication increased by 5.1% to 1.85 million. On the other hand, car navigation systems were up 5.5% to 5.83 million units, which was solid. (Nikkan Kogyo Shimbun, 25.01.2018)
Mitsubishi Electric, Nidec Scheduled for large capital investment Mitsubishi Electric plans capital investment of ¥230 billion in fiscal 2018. It is the same level as FY 2017, which is expected to be the highest in the past 10 years. We received strong sales of our mainstay automotive and FA equipment. In addition, Nidec has made capital investment of ¥150 billion in the fiscal year ended March 2019. (Nikkan Kogyo Shimbun, 10.01.2018, 17.01.2018)
Japan market for lighting to drop 17% by 2025 on rapid decline of incandescent lighting The market for lighting products is declining due to the rapid fall in demand for incandescent lighting, and is expected to shrink further from approximately ¥900 billion in 2015 to ¥738 billion in 2025. While demand for LED lighting continues grow, it is becoming commoditized and increasingly difficult to differentiate on price or function. Sales are expected to exceed ¥700 billion in FY2017, but to flatten out in 2018 and beyond.
Although market growth is hard to foresee, there is a selection of new manufacturers with price appeal who are keeping the market stable, while the immense market for reserve stock of LED lighting is the key to profitability for the major players.
By market segment, retail is the major source of demand for LED stock and fittings. The combination of frequent shop refits and scrap and build projects, plus long hours of business, is maintaining the demand for LED replacements, and penetration is expected to reach 40% for spot lighting and 20% for base lighting. In offices, where the replacement cycle is longer, penetration is estimated at 15% for spot, and 10% for base lighting, the slowest segment for LED adoption. Outdoor lighting requires high output. Here, the expanding line-up has slowed the pace of the price drop compared to spot and base lighting, and penetration is expected to reach 25% soon. (Fuji Keizai Co., Ltd., 15.01.2018)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
12 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Toyobo invests ¥3 billion in increased production of ceramic condensers Toyobo will expand its production of capacity of separation film to keep pace with the growing market for ceramic condensers. The company is investing ¥3 billion at its Tsuruga plant, and production is expected to start in July 2019.
The market for ceramic condensers is expanding rapidly as AI and IoT projects increase, requiring large volume data transmission. Currently the market is valued at approximately ¥700 billion, growing annually at 10% to ¥1 trillion in 2020. Domestic manufacturers occupy 50% of the market. More than 50% of the Japanese manufacturers produce ultra thin (less than 0.6mmx0.3mm) ceramic condensers, which are used in high-end products. These companies are indispensible in the manufacturing and processing of separation film, for which demand is expected to grow. The ¥3 billion capital investment at Tsuruga will position the company to respond to this demand. (Nikkan Kogyo Shimbun 04.12.2017)
Hitachi Metals to produce more nickel-alloy rear panels for OLED displays Hitachi Metals is to increase production of nickel-alloy plates used in the back panel of large Organic Light Emitting Diode (OLED) displays. To keep up with its customers’ increasing production, the company is investing approximately ¥8 - ¥10 billion in strengthening production capacity at its plant at Yasugi, Shimane Prefecture. The company also supplies all the metal elements used in wiring thin film transistors (TFT) for organic electronic panels. It is ramping up it technical and production capacity to meet growing market needs. (Nikkan Kogyo Shimbun 01.01.2018)
JOLED to Start Providing OLED Display Panel Samples to ASUS JOLED Inc has started offering its 21.6-inch 4K high-resolution OLED panel samples produced using the printing method to ASUSTeK Computer Inc. (ASUS). JOLED’s OLED display panel will be used for “ASUS ProArt™ PQ22UC,” a professional monitor that ASUS plans to unveil at CES 2018. (Nikkan Kogyo Shimbun 08.01.2018)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
13 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Steel & Metal
Crude steel production in FY 2017, 0.14% down to 104.66 million tons, and crude steel production in FY 2018 are expected to slightly exceed FY 2017 Crude steel production in 2017 announced on January 23 by the Japan Iron and Steel Federation was 146.69 million tons, decreased by 0.1% from the previous year and decreased for the third consecutive year. Demand remained steady mainly in the automobile industry and the Tokyo Olympic Games and the Paralympic Games, but factories fire accidents and troubles in the facilities pushed down production.
Demand for 2017 remained steady, mainly for automobiles, industrial machinery and construction machinery, related to the Tokyo Olympic Games and redevelopment in the metropolitan area. However, there was a fire accident in January at the thick plate factory of the Nippon Steel Sumikin Oita Steel Works (Oita City), and the trouble that occurred in August at the JFE Steel East Japan Steel Works Keihin area (Kawasaki city Kawasaki Ward) converter facility Production slowed down due to the influence. (C) iStock 13559678 Laoshi
Converter furnace steel production declined by 2.7% to 79.334 million 2600 tons for the first time in two years, falling below the 80 million ton benchmark. Electric furnace steel increased by 8.8% to 25.331 8200 tons, the first increase in three years. In steel type, ordinary steel decreased by 1.5%, to 795,6600 tons, specialty steel increased by 4.4% to 2,050,4600 tons. (Reuters 18.12.2017)
Production of crude steel in Japan 1000t 9.200
9.000
8.800
8.600
8.400
8.200
8.000
7.800 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 2016 2017
Source: The Japan Iron and Steel Federation
JFE Steel to open 5th new continuous casting machine in Kurashiki JFE Steel has announced it will install a fifth continuous casting machine at its West Japan regional headquarters in Kurashiki, Okayama Prefecture.The company will invest approximately 40 billion yen in new facilities which will have an annual output capacity of two million tons. (JFE Steel pressrelease 15.12.2017)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
14 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Chemicals & Pharmaceuticals
Chemical companies invest in increasing production for semiconductor manufacturing Chemistry major companies will start investing in the production of semiconductors one after another from 2018. Sumitomo Chemical will invest a total of ¥20 billion to increase the photoresist of the photosensitive resin used in semiconductor manufacturing at the Osaka plant (Konohana-ku, Osaka). This raises the production capacity for argon fluoride (ArF) immersion, thick film krypton fluoride (KrF) and i-line.
Tosoh also invested more than ¥10 billion for the expansion of quartz glass, etc., In addition to the quartz glass material factory of Nanyo Plant (Shunan City, Yamaguchi Prefecture), the company will increase its production plant in Yamagata, Taiwan, (C) iStock 11018350 RobertDupuis and the United States. Quartz glass is used for jigs for semiconductor manufacturing.
Showa Denko will establish a high-purity gas sales base in China. The semiconductor market for servers and data centers in China continues to grow rapidly, and with the miniaturization and multilayering of circuits, the needs of high-quality materials, which are the strength of Japanese companies, are expanding. (Nikkan Kogyo Shimbun 10.01.2018)
Manufacturers of functional chemical materials also invest in increased production based on demand for semiconductors With the trend of miniaturization and multi-layering needs accelerated by semiconductors, functional chemical companies have invested in increasing production of functional materials. SUMCO, a major silicon wafer company, will invest ¥43.6 billion, and new production facilities will be set for 110,000 pieces of monthly products. While the demand for smartphones, data centers, automobiles and semiconductors has expanded, silicon wafer prices have been on an upward trend, but Shin-Etsu Chemical Co., which competes with SUMCO, still keep watching the maket situation.
Tokuyama has decided to increase production of related materials such as parts for manufacturing equipment and cleaning liquid. It is about to resume strategic investment after finishing sorting out unprofitable business. The company is also planning to prepare its mainstay polycrystalline silicon so that it can cope with increased production by wafer makers.
Lamination of semiconductors also evokes unexpected demand. Daiboran, where Taiyo Nippon Sanso starts increasing production in China and South Korea, is a general-purpose gas that has been in existence for 20 to 30 years. Although demand temporarily decreased, it became a strategic product with the advent of NAND type flash memory of three dimensional (3D) structure. (Nikkan Kogyo Shimbun 15.12.2017)
Kuraray new plan increases investment to ¥200 billion; emphasis on vinyl acetate Kuraray unveiled its new medium-term business plan covering the financial years 2018 through 2020 on December 18, announcing a policy of increased capital investment. The new plan will increase investment to over ¥200 billion from the ¥170 - ¥180 billion of the current plan, which covers the years 2015-2017. The policy calls for aggressive investment in vinyl acetate and other core businesses. Of the investment amount, ¥100 billion has already been earmarked, and it is believed the ¥200 billion figure is attainable. The investment will also bring increased production of vinyl acetate monomer (VAM) and the ethylene/vinyl copolymer (EVOH) resin EVAL, as well as water-soluble poval film and synthetic leather. (Nikkan Kyogyo Shimbun 19.12.2017)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
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BASF Toda Battery Materials to triple LIB positive electrode production; firing plant at Yamauguchi BASF Toda Battery Materials will triple production capacity of positive electrode material for lithium ion secondary batteries (LIB). The two parent companies Toda Kogyo Co. Ltd, and BASF plan to expand production both in the US and Japan as part of their e-mobility market strategy. BTBM is vigorously expanding production capacity of high-nickel based positive electrodes at its Onoda plant, where it has the world’s largest sintering facility.
To launch their cooperation in the United States, Toda Kogyo and BASF are combining their two US production facilities at Battle Creek in Michigan and Elyria in Ohio to establish a new entity, BASF Toda America LLC, in which BASF will have the majority holding. (Nikkan Kogyo Shimbun 28.12.2017)
Asahi Kasei increases Japan and US production of lithium ion separation materials Asahi Kasei announced on November 1st that it will increase production in the US and Japan of insulating materials as separators for lithium ion secondary batteries. The capital investment carries a total value of approximately ¥7.5 billion. The new production facility is scheduled for completion in the first half of FY2020. It will provide both wet-type and dry-type processes, and increase the production area by 27.9% to 1.1 billion square meters (including buildings). With electric vehicles gaining pace globally, there is a rapid rise in demand for essential components. (Nikkan Kogyo Shimbun 12.01.2018)
Mitsubishi Chemicals plans 2.8 fold production increase of electrolytes for in-vehicle applications by 2020 Mitsubishi Chemicals is aiming for a 2.8 fold increase in its present production capacity of electrolytes for lithium ion secondary batteries by FY2020, raising annual output to 120,000 tons. Production facilities will be increased and improved primarily at production sites in Europe and the United States. The total capital investment is forecast in the range of ¥10 billion. Stricter environmental regulations and policies in major national markets is accelerating the shift to EVs. Business conditions have been difficult in recent years as China has been the dominant presence in consumer applications such as smartphones. As in-vehicle applications go mainstream, battery materials including minus electrolyte will take the lead.
Mitsubishi Chemicals is the biggest player, with a 40% share of the global market for second-generation lithium ion batteries. Its current annual capacity, including Japan, is 43,500 tons. The company is planning to increase it US capacity in stages to around three million tons, triple the current volume. It will reinforce its existing plant in Memphis while keeping a keen watch on domestic manufacturers’ production trends. (Nikkan Kogyo Shimbun 23.01.2018)
Mitsubishi Gas Chemicals to develop electrolytes for all-solid state batteries by 2020 Mitsubishi Gas Chemicals will develop solid electrolytes for all-solid state batteries by 2020. The company is joining with Tohoku University and several other universities and companies in a rush to commercialize the next-generation of automotive and EV battery materials after lithium-ion secondary batteries. The company is aiming for adoption as soon as 2024. Toyota and other car makers are intensifying development in Japan and overseas with a view to commercial viability in the first half of the decade. Major materials producers including Toray and Sumitomo Chemicals are also ramping up their research and development, and competition in next-generation batteries is likely to intensify further. (Nikkan Kogyo Shimbun 05.01.2018)
Nippon Sheet Glass plans ¥10 billion + R&D in next FY; developing high performance glass Nippon Sheet Glass plans to increase R & D expenditure in FY 2018 to more than 10 billion yen. The company acquired Pilkington, the largest in the industry, in 2006 for about ¥600 billion yen, but under the burden of amortization, goodwill and other costs, R&D was restricted to approximately ¥8 billion until after 2011. Now a healthier financial structure means that R&D can be increased to ¥10 billion for the first time in eight years. (Nikkan Kogyo Shimbun 09.01.2018)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
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Energy
Government introduces bill setting rules for offshore wind power The government released an overview on January 9 of a bill to promote offshore wind power generation. The bill will establish a framework of rules for wind power generation in Japan’s territorial waters, and create a structure to grant fixed-term permits to business operators.
Encouraging the development of related industries will reduce the cost of wind power generation, which emits little C02. While offshore wind power generation is being rapidly introduced in Europe, Japan lags behind. The cost per kilowatt hour of offshore wind power in Japan is at present is around ¥36; three to six times the cost in Europe.
Until now there has been no unified rule structure governing marine use, so a company wishing to develop wind power generation faces difficult dealings with shipping and fishing fleet operators. The bill is designed to make the processes easier and more transparent. Concretely, after the government has determined the basic policy, METI and the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) will designate areas where maritime use will be encouraged (C) iStock 9529622_zentila based on local opinion. After that it will be possible for companies to apply for long-term use of a maritime zone. (Nikkan Kogyo Shimbun 10.01.2018)
Hitachi Zosen to cancel wind power construction plan in Niigata citing unprofitability Hitachi Zosen will cancel its joint venture construction project to build offshore wind power generation at Murakami, Niigata Prefecture. On a construction cost estimation, the company judged that the project cannot be profitable with current technology. The company also intends to withdraw from the city’s business promotion committee, which oversees project planning and implementation.
The new business of offshore wind power generation is a promising field for Hitachi Zosen, The company has considered EPC (Engineering, Procurement and Construction) participation in joint projects in Iwafune Bay with Hitachi Ltd.,Sumitomo Electric Industries Ltd.,and others. Hitachi Ltd. is validating several offshore wind power generation projects in Japan, and is committed to developing the technology. It will continue its technical development to further reduce costs. (Nikkan Kogyo Shimbun 4.12.2017)
Engineering expected to improve in 2018 on strong orders for LNG and other renewable energy projects The long sluggish engineering market looks like it is reaching a turning point in 2018. Large-scale investment in liquified natural gas (LNG) plant is set to resume, and construction of further renewable energy projects can be expected. All engineering companies reported a healthier order book, providing a foothold for improved earnings in the medium term. (Nikkan Kogyo Shimbun 04.01.2018)
Kita-Kyushu City and Hibiki Wind Energy seal agreement; offshore wind power construction to start FY2022 Kita-Kyushu City and Hibiki Wind Energy have signed an agreement aimed at strengthening their cooperation, following the basic agreement signed in February last year which selected Hibiki as a preferred partner. The agreement covers the installation of offshore wind power generation facilities at Hibikinada off Wakamatsu-ku, in Kitakyushu City. With this, Hibiki is the official contractor. Construction is expected to start in 2022 after surveying the sea area and wind conditions, and completing an environmental impact assessment.
Hibiki consists of five companies, including Kyushu Mirai Energy and Kyudenko, formerly subsidiaries of Kyushu Electric Power which became a Special Purpose Company (SPC) in April last year. Hibiki started surveying the sea area and wind conditions in June last year. The current project is a 5,000 Kilowatt class generation in a maximum of 44 offshore turbines, Japan’s largest project of its kind. This is Japan’s first public offering since the revision of the Ports Law in 2016, which allows use of a marine area for up to 20 years; and it is expected to provide reliable power generation. The city’s policy is to promote a comprehensive wind power support base in the Hibikinada district. In addition to attracting related industries, such as construction and maintenance, sales to other regions is also being considered. (Nikkan Kogyo Shimbun 11.01.2018) VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
17 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Toda Construction uses environmental bond for wind power construction; expanding investor base Toda Construction has issued a specified green bond to raise financing for offshore wind power generation. It will appeal to the environmentally conscious and bring the company closer to investors concerned about the environment, and will also help to keep procurement costs down. The green bond will be an option in financing future offshore wind power generation projects. Green bond issues in Japan are rare, but they have the possibility to attract ESG (Environmental, Social and Governance) investment.
Green bonds are a security whose issuance is restricted to environmentally friendly business. In December 2017, Toda Construction became the first corporation in Japan to issue a green bond for a project related to its core business. The value of the issue was ¥10 billion. The money raised will be used in the construction of an offshore wind power generation facility in the bay at Goto City, Nagasaki Prefecture. It is the only offshore power generation in Japan to use a floating structure. Nine generators, with a combined output of 22,000 KW, are planned. If the environmental impact assessment is favourable, construction is expected to begin in FY 2018. (Nikkan Kogyo Shimbun 17.01.2018)
Mitsui Zosen enters offshore wind power business; invests ¥5 billion in 7500 KW in Toyama Mitsui Zosen is entering the offshore wind power generation business with the construction of a 7500 KW plant approximately 800 meters from shore in Nyuzenmachi, Toyama Prefecture. Mitsui has invested in a management company together with regional banks and wind power generation companies; it expects to start commercial operation in FY2020 and to operate the project for 20 years. The total project cost is approximately ¥5 billion. It is expected to be the first commercial project in Japan to use a structure fixed to the sea bed. Japan is lagging behind Europe in installation of offshore wind power. The government views offshore wind power as an important power source, and is promoting a system of rules of the sea to encourage the transition from the experimental phase to full commercial involvement.
Mitsui Zosen has contracted Mitsui Engineering and Construction to undertake EPC (Engineering, Procurement and Construction). It will construct four windmills with an output of 2,000KW at a depth of 15 meters. The project will use windmills made by Hitachi; Mitsui Zosen will adapt its harbour cranes to transport the windmills to their offshore position and will fix them in place. (Nikkan Kogyo Shimbun 22.01.2018)
Daiwa Energy to build 2000 KW wind power generation in Ehime Daiwa House Construction, through its group company Daiwa Energy, will construct a wind power generation plant in Seiyo City, Ehime Prefecture. This is the company’s second such project, following its ‘DREAM Wind Sadamisaki, and will have an output of 16,000 KW. It is planned to start generating in November 2019. DREAM Wind Ehime Seiyo is expected to generate approximately 35,000 MWh per year, equivalent to the energy consumption of 8,000 households calculated at 4,434 kWh per year per household. The electricity generated will be sold to Shikoku Electric Power for 20 years using the fixed price purchasing system for renewable energy. (Nikkan Kogyo Shimbun 22.01.2018)
TDK improves solar cell efficiency 1.3 fold for IoT; on the market within the year TDK will bring to market within 2018 a solar cell that improves power generation efficiency by 1.3 times compared to currently used cells, aimed at power sources for IoT devices. The cell uses environmental generation, a technology known as energy harvesting, by which even a small amount of light or indoor illumination can generate electricity. (Nikkan Kogyo Shimbun 29.01.2018)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
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General Industry Development
High capital investment for productivity improvement, machine orders record High Market conditions of machine manufacturing equipment such as machine tools, forming machines and cutting tools are on the rise. Japan Forming Machinery Association such as press machines and fabricating machines forecast that orders for 2018 will increase by 3.4% from fiscal 2017 to ¥363 billion, the Japan Cutting & Wear-resistant Tool Association upwardly revised the forecast for 2017. Machine tools are likely to record a record high, far exceeding the same year's target for orders issued by the Japan Machine Tool Builders’ Association at the beginning of 2017.
Demand for press machines is likely to remain high. Japan Forming Machinery Association forecasted orders for 2018 in fiscal year 2008 to be 363 billion yen, up 3.4% from the previous year. It is expected to renew the highest ten-year high following the Lehman shock in 2008 for two consecutive years. In the past 15 years it is the third level that approaches ¥393.5 billion in fiscal 2006, which was favorable worldwide automobile production, and ¥393.4 billion in fiscal 2007.
Of the ¥363 billion orders received, orders for press machines rose 6.3% to ¥170 billion, orders for fabricating machines flatted ¥110 billion, services increased by 2.5% to ¥83 billion. Orders for press machines are second highest after Lehman shock. Over ¥100 billion of sheet metal system is the fifth time in 15 years.
100 Mio. Yen Development of order value of forming machinery 4.500 70,0
4.000 60,0 3.500 50,0 3.000
2.500 40,0
2.000 30,0 1.500 20,0 1.000 10,0 500
- 0,0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Press Machine Fabricating Machine Service/Part/Tooling Export ratio
Source: Japan Forming Machinery Association
Capital investment in the automobile industry is expected in FY 2018. In particular, there is high expectation for a tandem press line which forms an outer panel which is a form of an automobile. In a tandem line, one case may be 4 billion yen scale, which greatly affects the total amount. Until now, it has been said that the willingness of automakers to invest in tandem presses in North America is high, but it has not been implemented. In fiscal year 2017 settlement of forming machine manufacturers, it seems that Hitachi Zosen Corp., which has a large proportion of large press machines such as tandem line, is being influenced. In FY 2018, observations that the investment plan is finally going to be implemented are expanding.
Regarding press machinery, domestic investment for electric vehicles (EV) is likely to begin full-scale. In the EV-related field, the motor core, which is the key component of the driving motor, is in the process of increasing production. AIDA ENGINEERING plans to increase the production capacity of the high- speed press machine that forms the motor core by 1.5 times in FY 2018.
Meanwhile, sheet metal machines are likely to have strong demand for infrastructure and building- related demand for the Tokyo Olympic and Paralympic Games in 2020. The US is expected to boost capital investment if corporate tax cuts are introduced. Amada Holdings (HD) already has two factories in the field by sheet metal machinery and molds by 2019. There is a trend of protection trade in the world, we are reinforcing the production system of the United States, we will take in demand without getting it. (Nikkan Kogyo Shimbun, 10.01.2018)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
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Order value of machine tool / over 1.6 trillion yen Japan Machine Tool Builders’ Association announced on January 23, 2017 machine tool orders received increased by 31.6% from the previous year to ¥1,645,554 million, continued to be active in 2018, the highest ever recorded in 10 years. Foreign demand increased by 41.2% to ¥1,161.85 billion, the highest ever in three years. Domestic demand increased by 18.6% to ¥629,369 million.
In 2017, major markets in Japan, the United States and Europe were all booming, with China as the lead. China is 2.1 times, a substantial increase of ¥347.51 billion. Capital investment, which seems to be the background of China's policy "Made in China 2025", has progressed and large demand related to smartphones also arises. Capital investment in neighboring countries of China was aroused and Asia's share of orders received increased by 10.7 points to 50.6% (34.2%, which is 11.6% higher in China), accounting for more than half of external demand.
Mio. Yen Development of order value of machine tool 1.800.000
1.600.000
1.400.000
1.200.000
1.000.000
800.000
600.000
400.000
200.000
- 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Domestic demand Foreign demand
Source: Japan Machine Tool Builders’ Association
Industrial tools / upward swing also careful attitude Japan Cutting & Wear-resistant Tool Association (JTA) expects the production value of industrial tools in fiscal 2017 to increase by 6.9% from the previous year to ¥477.7 billion. We upgraded our original forecast of ¥458.1 billion. According to the JTA, busyness has increased since August 2017. In addition to being busy for passenger cars and smartphones, commercial vehicles and construction machinery have increased.
Demand for industrial robots is expanding, Order amount 2 trillion yen by 3 to 5 years later Demand for industrial robots worldwide is rapidly expanding. According to the Japan Robot Association (JARA), the robot production amount in 2018 will be for the first time in 1 trillion yen, and the order value will be ¥1,100 billion. In 2017 it will be ¥900 billion, an increase of 28% over the previous year. "Order amount ¥2 trillion by 3 to 5 years later" (Chairman Inaba Yoshihiro = President Fanuc) will also come into view. The factory automation progresses both domestically and internationally. In particular, the Chinese market is growing, and not only the automobile industry but also the user's soldiers such as electronic electronics manufacturing service (EMS) are expanding. (Nikkan Kogyo Shimbun 15.01.2018)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
20 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Mio. Yen Development of production value of robots
1.200.000 Forecast
1.000.000
800.000
600.000
400.000
200.000
- 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Japan Robot Association
Semiconductor manufacturing equipment continues to grow In fiscal year 2017, while semiconductor manufacturing equipment continues to grow significantly following fiscal year 2016, FPD manufacturing equipment will grow steadily also, we forecast a total increase of 21.9% to ¥2.4996 trillion. Assuming there will be a robust growth both in the semiconductor manufacturing equipment market and the FPD manufacturing equipment market, we have forecasted that sales for fiscal year 2018 will increase 8.3% to ¥2.7072 trillion. As for fiscal year 2019, we anticipate that the sales of the semiconductor manufacturing equipment will slightly increase and the FPD manufacturing equipment enter adjustment phase, so we have forecasted that overall sales will decrease 1.6% to ¥2.6641 trillion. (Market Forecast Report of Semiconductor Equipment Association of Japan January 11, 2018)
100 Mio. Yen Development and forecast of sales of seminductor and FPD 25.000 Forecast
20.000 Semiconductor FPD
15.000
10.000
5.000
- 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Semiconductor Equipment Association of Japan (SEAJ)
NSK will raise the capital investment in 2017 - 2006 to over ¥140 billion NSK will raise the capital investment in 2017 - 2006 to over ¥140 billion, which is a 10% increase over the original plan, due to increased demand for parts for automobiles and industrial machinery. Expand facilities in China, Japan, South Korea, etc., and expand production of bearings and ball screws. In China, demand for vehicles is higher than expected, and the adoption of bearings has expanded due to the penetration of automobile transmissions (AT). Inquiries for direct-drive products used for positioning VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
21 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
machine tools and semiconductor manufacturing equipment in the world are increasing, and rush to improve the supply system. In the parts for automobiles, the number of new car sales in China has increased at a pace exceeding the assumption of NSK, and the local production base continues to operate at full capacity. The installation of AT and multistage AT have also progressed, and inquiries for bearings of related parts are becoming active. (Nikkan Kogyo Shimbun 15.01.2018)
Aida Engineering raises the production capacity of the press machine to 1.5 times Aida Engineering raises the production capacity of the press machine that manufactures the motor parts of electric vehicles (EV) to 1.5 times the present. Formal decision will be made nearby, and in FY 2018 we will set up a production increase system at Tsukui Works (Sagamihara City Green Ward). Apart from this, we will also consider production in China. Press orders are expected to be 6 billion yen in fiscal 2017, 1.5 times higher than fiscal 2016. Because we can expect expansion trend for a long term, we decided to increase capacity. EV is calling for equipment demand.
A large high-speed press that produces increased production of Aid is suitable for manufacturing a motor core which is a key component of a motor. Approximately ¥1 billion will be invested in the Tsukui office and securing production capacity of ¥11 billion in orders received. Small presses produced at the workplace advance production transfer to Malaysia. Sales of large high-speed presses are increasing rapidly. Aida plans to increase by 50% compared to fiscal 2016 in fiscal 2017, and an order increase of ¥7.2 billion by 80% in fiscal 2018. It is expected to reach the current production capacity in FY 2006 plan. (Nikkan Kogyo Shimbun 5.12.2017)
GX develops a robot „satisfy the heart“, Fund ¥6.4 billion GROOVE X announced on December 4, 2017 that it will raise up to ¥6.4 billion from Future Genesis Fund (“Mirai Sosei Fund”) and Innovation Network Corporation of Japan (INCJ) operated by the Sparks Group with a third-party allotment increase. The funds will be used to fund development of a new generation home robot, which GX aims to launch in 2019. The procurement amount of GX totaled 8 billion yen.
GX develops a robot that aims to satisfy the heart. Rab is a concept name that combines love and robot. Product announcement is scheduled for the end of 2006, funds raised will be used for product announcement and marketing expenses in addition to development. GX is a robot development venture company launched in 2015 by President Hayashi who served as development manager of SOFTBANK's humanoid robot "Pepper". (Nikkan Kogyo Shimbun 5.12.2017)
JFE Steel developed four new technologies for spot welding of ultra high tension JFE Steel announced on December 4, 2017 that it developed four new technologies for spot welding, such as a technology that can be efficiently joined even in Ultra High tension, for assembly of automobiles. The degree of freedom in the design of the body structure is increased, which is said to lead to weight reduction of the car body.
The four technologies of (1) J-MAC spot welding (2) pulse spot welding (3) single side spot welding (4) intelligent spot welding - When welded parts of spot welding are dense, J-MAC can solve the problem that the current passing through the steel sheet is dispersed and the amount of heat generation is reduced, so that the calorific value can be optimized. As compared with the "Temper energization method" which was used to ensure the strength of spot welds of ultrahighthene pulse, the pulse time is about half of the energization time and the process time can be shortened. The single side eliminates the need to drill holes in the member by spot welding of the closed section member, and intelligent can maintain the welding quality even when three steel plates of different thickness and kind are joined.
As the number of examples of adopting ultrahighten in the car body of automobiles increased, it became difficult to construct the spot welding, and the design of the car body was also restricted. Practical use of these technologies enhances usability of steel sheets including ultrahightens. (Nikkan Kogyo Shimbun 5.12.2017)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
22 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Sodick starts selling MC made in China to domestic market Sodick Co., Ltd. starts selling machining centers (MC) made in China to domestic market. A new company Dick Japan Trading established by a wholly-owned subsidiary, Sodick FT (Kohoku-ku, Yokohama) etc., began handling the Machining Center (MC) of GroupGroup Precision Industry (Suzhou) in China. Eventually, I plan to work on machines other than China and other than MC. It aims to respond to a wide range of user needs by handling imported products as well as our own company. The company is the first time to establish an import trading company of machine tools. Group group precision is a company founded by Sodick OB and manufactures and sells laser processing machines and injection molding machines in addition to MC for domestic market. (Nikkan Kogyo Shimbun 22.01.2018)
Sumitomo Electric Industries invest ¥8 billion to Hokkaido group companies Sumitomo Electric Industries will invest approximately ¥8 billion to Hokkaido group companies that produce cutting tools and increase production capacity by about 20% at the end of 2019 compared to the current situation. The company will gradually expand facilities in existing buildings and in April will also begin construction of a new factory building. We aim for full operation in December 2019. (Nikkan Kogyo Shimbun 22.01.2018)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
23 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Exhibitions
February 2018 World Smart Energy Week 2018 • FC EXPO 2018 - 14th Int'l Hydrogen & Fuel Cell Expo • PV EXPO 2018 - 11th Int'l Photovoltaic Power Generation Expo • PV SYSTEM EXPO 2018 - 9th Int'l Photovoltaic Power Generation System Expo Name of the Exhibition • BATTERY JAPAN 2018 - 9th Int'l Rechargeable Battery Expo • 8th INT'L SMART GRID EXPO • WIND EXPO 2018 - 6th Int'l Wind Energy Expo & Conference • 3rd INT'L BIOMASS EXPO • THERMAL POWER EXPO 2018 - 2nd Next-generation Thermal Power Generation Expo Date 28.02.2018 – 02.03.2018 Location Tokyo Big Sight URL http://www.wsew.jp/en/Home/ Organizer Reed Exhibitions Japan Ltd. Visitor number 62,426 (including: 4,679 foreign visitors) Exhibitor number 1,378 (including: 480 foreign exhibitors)
March 2018 Name of the Exhibition SECURITY SHOW 2018 (26th edition)
Date 06.03.2018 –09.03.2018 Location Tokyo Big Sight URL https://messe.nikkei.co.jp/en/ss/ Organizer Nikkei Inc. Visitor number 131,442 Exhibitor number 201
Name of the Exhibition LED NEXT STAGE 2018 Date 06.03.2018 –09.03.2018 Location Tokyo Big Sight URL https://messe.nikkei.co.jp/en/ld/ Organizer Japan LED Association, Nikkei Inc. Visitor number 56,760 Exhibitor number 151
Tokyo CareWEEK 2018 • 4th CareTEX 2018 Name of the Exhibition • 1st Care Technolgy • 1st Healthcare Japan • 1st CareCity
Date 14.03.2018 – 16.03.2018 Location Tokyo Big Sight
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URL http://careweek.jp/eng/ Organizer Boutiques, Inc.. Visitor number k.a. Exhibitor number k.a.
April 2018 CONTENT TOKYO 2018 • 8th LICENSING JAPAN • 6th Video & CG Production Expo (CREATIVE JAPAN) • 6th Content Distribution & Management Expo Name of the Exhibition • 4th Advanced Digital Technology Expo • 4th Content Marketing Expo • 2nd Graphic Design Expo • 7th Creators' Expo Date 04.April.2018 – 06.April.2018 Location Tokyo Big Sight URL http://www.content-tokyo.jp/en/ Organizer Reed Exhibitions Japan Ltd. Visitor number 38.746 Exhibitor number 1418
Name of the Exhibition 2nd AI EXPO -Artificial Intelligence Exhibition & Conference Date 04.April.2018 – 06.April.2018 Location Tokyo Big Sight URL http://www.ai-expo.jp/en/HOME/ Organizer Reed Exhibitions Japan Ltd. Visitor number 41,677 Exhibitor number 147
Communications & Broadcasting Week 2018 • 2nd Video Communications Expo - VCOM 2018 Name of the Exhibition • 18th Fiber Optics Expo - FOE 2018 • 1st Mobile Network Expo • 1st UHD Equipment Expo
Date 04.April.2018 – 06.April.2018 Location Tokyo Big Sight URL http://www.vcom-expo.jp/en/Home/ Organizer Reed Exhibitions Japan Ltd. Visitor number 67,625 (including: 4870 foreign visitors) Exhibitor number 1,332 (including: 306 foreign exhinitors)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
25 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
3rd Manufacturing World Nagoya • 3rd Mechanical Components & Materials Technology Expo Name of the Exhibition • 3rd Design Engineering & Manufacturing Solutions Expo • 2nd Factory Facilities & Equipment Expo • 2nd Aerospace Technology & Components Expo Date 11.April.2018 – 13.April.2018 Location Nagoya International Exhibition Hall (Portmesse Nagoya) URL http://www.japan-mfg.jp/en/nagoya/ Organizer Reed Exhibitions Japan Ltd. Visitor number 34,573 (including: 247 foreign visitors) Exhibitor number 979 (including: 82 foreign exhinitors)
Name of the Exhibition 2018 Japan Meat Industry Fair 43rd Date 11.April.2018 – 13.April.2018 Location Tokyo Big Sight URL http://www.shokuniku-sangyoten.jp/ Organizer Japan Meat Industry Fair Executive Committee Visitor number 77,470 Exhibitor number 94
Name of the Exhibition Sea Japan 2018 Date 11.April.2018 – 13.April.2018 Location Tokyo Big Sight URL http://www.seajapan.ne.jp/en/
Organizer UBM Japan Co., Ltd.
Visitor number 14,676 (including: 949 foreign visitors) Exhibitor number 565 (including: 220 foreign exhinitors)
Name of the Exhibition Techno-Frontier 2018 • MOTORTECH JAPAN 2018 • MOTION ENGINEERING JAPAN 2018 • MECHATRONICS TECHNOLOGY 2018 • MACHINE PARTS & PROCESSING TECHNOLOGY 2018 • POWER SYSTEM JAPAN 2018 • ECO POWER SOLUTION 2018 • EMC JAPAN 2018 • THERMAL ENGINEERING 2018 • AI/IoT TECH 2018
Date 18.April.2018 – 20.April.2018 Location Makuhari Messe URL https://www.jma.or.jp/TF/en/index.html Organizer Japan Management Association (JMA) Visitor number 30,046 (including other exhibition)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
26 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
Exhibitor number 478 (including other exhibition)
Name of the Exhibition Station & Airport Terminal Expo 2018 • Bus & Bus Service System Expo 2018 • Parking System Expo
Date 18.April.2018 – 20.April.2018 Location Makuhari Messe URL https://www.jma.or.jp/st/en/index.html Organizer Japan Management Association (JMA) Visitor number 30,046 (including other exhibition) Exhibitor number 478 (including other exhibition)
Name of the Exhibition International Drone EXPO Date 18.April.2018 – 20.April.2018 Location Makuhari Messe URL https://www.jma.or.jp/drone/en/index.html Organizer Japan Management Association (JMA) Visitor number 30,046 (including other exhibition) Exhibitor number 478 (including other exhibition)
Name of the Exhibition CPhI Japan (Japan Life Science Week) • CPhI Japan 2017 for pharmaceutical ingredients • ICSE Japan for contract manufacturing and services • P-MEC: for pharmaceutical and laboratory machinery, technology and equipment • BioPh: for biopharmaceutical development and services • InnoPack: for pharmaceutical packaging and drug delivery systems • Health Care IT Date 18.April.2018 – 20.April.2018 Location Tokyo Big Sight URL http://www.japanlifescienceweek.com/en/ Organizer UBM Japan Co. Ltd., UBM EMEA Visitor number 19,189 Exhibitor number 528 (including: 356 foreign exhinitors)
Name of the Exhibition MEDTEC Japan (Japan Life Science Week) • MEDTEC Japan • Electro Med Japan • Smart Health Japan • Test Kit Japan • Care-Welfare Robot Expo Japan • Fine Chemicals Japan
Date 18.April.2018 – 20.April.2018 Location Tokyo Big Sight
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
27 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
URL http://www.japanlifescienceweek.com/en/ Organizer UBM Japan Co. Ltd., UBM EMEA Visitor number 32,561 Exhibitor number 544
Name of the Exhibition INTERMOLD OSAKA (2018) • Die & Mold Asia OSAKA (2018) • Japan Metal Stamping Technology Exhibition OSAKA (2018) Date 18.April.2018 – 21.April.2018 Location INTEX OSAKA URL http://intermold.jp/english/ Organizer Japan Die & Mold Industry Association, Television Osaka Japan Metal Stamping Association Visitor number 45,937 Exhibitor number 461
Name of the Exhibition OPIE'18 • LASER EXPO • LENS EXPO (Design & Manufacturing) • IR+UV EXPO (Application & Technology) • Industrial Camera EXPO • Medical & Imaging EXPO • Space & Astronomical Optics EXPO • Positioning EXPO Date 25.April.2018 – 27.April.2018 Location Pacifico Yokohama URL http://www.opie.jp/en/ Organizer OPI Council Visitor number 15,214 (including: 729 foreign visitors) Exhibitor number 351 (including: 45 foreign exhinitors)
Name of the Exhibition Japan International Welding Show 2018
Date 25.April.2018 – 28.April.2018 Location Tokyo Big Sight URL https://weldingshow.jp/en/ Organizer The Japan Welding Engineering Society Sanpo Publications Incorporated Visitor number 95,873 (including: 5013 foreign visitors) Exhibitor number 215 (including: 14 foreign exhinitors)
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444
28 Japan Economic and Industrial Scenario, 01/2018 VDMA JAPAN Liaison Office
VDMA Japan Liaison Office
The VDMA liaison office in Japan represents the interests of the German engineering industry toward the Japanese administration and is responsible for exchange with the Japanese association world. The office also assists individual member companies. Simple questions are answered free of charge, while for more complex tasks, the office estimates the expected service costs as an offer. The main tasks so far were:
» Making or sourcing of particular market surveys » Search for business partners » Information about specific Japanese companies » Organize symposia and similar presentations of VDMA members » Supporting of trade fairs » Finding personnel and office/warehouse facilities » Setting up of a Japanese office
Contact: VDMA, German Engineering Federation Japan Liaison Office Heiwa Hasegawa, Representative c/o German Chamber of Commerce and Industry in Japan Sanbancho KS Bldg., 5F, 2-4 Sanbancho, Chiyoda-ku 102-0075 Tokyo, Japan
Tel: +81 3 5276 6632 Fax: +81 3 5276 2455 E-Mail: [email protected] Internet: http://vdmajapan.org
VDMA-Newsletter “Japan”, Edition 01/2018 Contact: Oliver Wack, Telephone: +49 69 6603-1444