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Annual Technical Report 2012 Year Ended March 31, 2013 OITDA Optoelectronics Industry and Technology Development Association — CONTENTS —

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Annual Technical Report 2012 Year Ended March 31, 2013 OITDA Optoelectronics Industry and Technology Development Association — CONTENTS — Annual Technical Report 2012 Year Ended March 31, 2013 OITDA Optoelectronics Industry and Technology Development Association — CONTENTS — Message from OITDA ………………………………………………………… 01 Optoelectronic Industry Trends ……………………………………………… 02 Optoelectronic Technology Trends ………………………………………… 16 Technological Strategy Development ……………………………………… 24 Founding New Types of Business …………………………………………… 26 Standardization ………………………………………………………………… 27 Educational and Public Relations Activities………………………………… 48 Main Committees in FY 2012 ………………………………………………… 52 Supporting Members ………………………………………………………… 53 Yasuhisa Odani President Optoelectronics Industry and Technology Development Association (OITDA) It is my pleasure to present to you the latest issue of the Annual Technical Report 2012, which outlines the surveys, research and development activities of OITDA in FY 2012. FY 2012 was a very harsh year for the optoelectronics industry in Japan. The greatest cause of worse results in recent years was the very strong yen, which went below 80 yen per dollar. In addition, the energy supply insecurity after the Earthquake, the higher corporate taxes and unnecessary regulations created a negative investment environment, which accelerated the transfer of production bases to overseas. These points improved quickly due to the influence of Abenomics after the change in political administration at the end of 2012 and also the different dimension of monetary easing by the Bank of Japan, and we think we can expect an improvement in FY 2013. There was also a variety of negative factors arising from conditions inherent to the optoelectronics industry, such as a lack of current demand which was reduced by past politically-accelerated domestic demand, large price reductions arising from an excess of new entrants into the business, underinvestment due to a lack of domestic private funds, new product development by the overseas companies, and the introduction of new substitutive technologies in competition with optoelectronics. Consequently, according to the Optoelectronics Industry Trends Survey conducted every year by OITDA, domestic production value decreased by 10.3% in FY 2011, and again showed a negative growth of 3.3% in FY 2012 to 7,062.4 billion yen. The total shipment value which fell by 2.7% in FY 2011 also had negative growth of 0.2% to 15,679.8 billion yen in FY 2012. In order to overcome the current situation, the optoelectronics industry must think of and construct new business models, new products, new services, etc. To achieve these, we think that technology development is becoming increasingly essential. Among various promising optoelectronics technologies, OITDA has selected the key technologies with the potential to develop into industries. In order to turn such potential into reality, we address the following priority issues: (1) research and study of current and future trends of the optoelectronics industry; (2) promotion of technological development; (3) promotion of standardization; and (4) creation of new business. In FY 2012, we directed our efforts to conduct these issues as in previous years and, based on the results of such efforts, also conducted dissemination of technology, international cooperation and provision of information. Details of the activities and outcomes of individual issues are presented in the report. Here, I would like to introduce noteworthy events in FY 2012. First, the road map was created for the “Safety and Security Photonics” field, focusing on sensing and imaging optoelectronics technologies that contribute to the safety and security of people. It is expected that this would lead to "The Sensor System Development Project to Solve Social Problems", a new project of the Ministry of Economy, Trade and Industry. Also, a survey was done related to optical communication technology utilizing a highly efficient spectrum aimed at development of new switching technology for the next generation optical network. Furthermore, in the area of standardization, a draft standard on "Photobiological safety of lamp system for image projector" was submitted to the IEC/ TC 76 (Laser Safety) by Japan for the first time. In the international area, the International Optoelectronics Association (IOA), a conference of the world’s optoelectronics-related organisations was held in Yokohama, along with the InterOpt2012 exhibition. In order to support the growth of the optoelectronics industry and technology, we at OITDA will continue to pursue our activities under the guidance of the Ministry of Economy, Trade and Industry and other governmental organizations, with the understanding and cooperation of our supporting members and many other people from the business world and the academic community which are our important partners. We look forward to your continued support and cooperation. 1 Annual Technical Report 2012 OITDA Optoelectronics Industry Trends Introduction to a significantly negative growth. The industrial economy of Japan is being buffeted by a harsh ● Estimated production for FY 2012: 7,062.4 billion yen, growth environment of global recession caused by the EU crisis, very strong rate: -2.7% yen, and prolonged deflation. With such large economic issues faced It is expected that there will be great development in the photovoltaic by Japan and other countries, the optoelectronics industrial sector has energy field, the input/output field will transition towards positive growth contributed greatly to Japan’s economic growth by its rapid compared to the preceding fiscal year thought it has not grown for a industrialization of advanced technologies. From now on, there is a need long time, and the solid-state lighting devices and equipment field will for this sector to take a significant leap forward, and become a driving continue its positive growth from last fiscal year. On the other hand, the force of the industrial world. other 5 fields will have negative growth, particularly, the whole displays Because of this, the Optoelectronics Industry and Technology and solid-state lighting field is expected to continue to be weak with a Development Association (OITDA) was established in 1980, and since large negative growth for 2 years. then, thanks to a great deal of support and cooperation from the affiliated ● Flat levels likely in FY 2013 (qualitative projections) members and enterprises, OITDA has annually conducted a “Survey of The photovoltaic energy field is predicted to become the driving force, the Trends of the Optoelectronics Industry.” The continuous data and the laser processing field will have positive growth, but the other accumulated over more than 30 years is highly regarded as basic 5 fields are likely to be flat or a little negative. information on the optoelectronics industry trends. To survey the optoelectronics industry trends, the Optoelectronics 1.3 Survey of Total Shipment Value in FY 2011 and FY 2012 Industry Trend Research Committee was established for formulating Table 2 shows the total shipment values in FY 2011, estimated total the basic policies for 8 fields: “1. Establishment of specific research shipment values in FY 2012 and projected total qualitative shipment committees for optical communication, optical storage, input-output, values in FY 2013. display / solid-state lighting, photovoltaic energy, laser processing, and ● FY 2011 (actual): 15,716.2 billion yen, growth rate: -2.7% sensing/measurement under the Optoelectronics Industry Trend Research The two fields of optical storage and measuring and sensing, as well Committee (parent committee)” and so on. as the solid-state lighting devices and equipment field had positive Further, it must be noted that the response period for enterprises this growth compared to the preceding fiscal year, while the other 5 fields fiscal year was from December 2012 to February 2013, and thus presents declined to negative growth. In particular, the displays and lighting field a patchy pattern, reflecting the changing economic situations such as shipments were in the same situation as domestic production. the trend of a weaker yen due to Abenomics from end of FY 2012 ● FY 2012 (estimate): 15,679.8 billion yen, growth rate: -0.2% onwards. Large positive growth compared to the preceding fiscal year is predicted only for the photovoltaic energy field, while the other 6 fields 1. Domestic Production and Total Shipments for the are predicted to have negative growth. In particular, the optical storage Optoelectronics Industry field is likely to be weak with large negative growth. 1.1 Survey on the Domestic Production of the Optoelectronics Industry ● Modest increase is likely in FY 2013 (qualitative projections) A survey on the domestic production and total shipments of the The photovoltaic energy field is expected to become the driving force, optoelectronics industry was conducted as described below. with positive growth in the laser processing field, while the other 5 fields Questionnaire surveys were performed on domestic production value are expected to have a flat or small declines. and all shipments including overseas production, from October 2012 to the end of February 2013 with the participation of 335 domestic Optoelectronic industrial products field enterprises manufacturing optoelectronics-related products 1. Optical Optical transmission equipment/systems, (optoelectronics equipment and components) to determine actual communication: optical fiber splicing equipment, light performance in FY 2011, estimated production for FY 2012, and emitting equipment, photo
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