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THE AUGUST 23, 2010 issue of the Wall Street Journal (WSJ) highlighted Japan's passive component industry with a headline of “Kyoto's Unsung Tech Heroes.” According to the article, Japan still commands a large market share. Few consumers recognize the makers of the so-called passive components, a category that doesn't include semiconductors. But they are the unsung heroes in Japan's otherwise struggling electronics industry.
According to Japan Electronics and Information Technology Industries Association, the country's electronic parts makers currently hold 40% of the global market based on the value of output. The category “electronic parts” does not include semiconductors. The Kyoto companies include:
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Kyocera, which holds the top share in ceramic packages that protect components inside cellphones, cameras and other devices.
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Murata Manufacturing Co., a leading maker of monolithic ceramic capacitor. The company says it estimates its global market share at around 35%. Two of Murata's major rivals in ceramic capacitors, Taiyo Yuden Co. and TDK Corp., are also headquartered in Japan.
The WSJ article pointed out that ìthe sector's landscape is rapidly changing. Over the past few years, Samsung and other Asian firms have been gradually increasing their presence in ceramic capacitors. This situation is worryingly familiar to Japan, which has already seen Asian rivals take over in many areas of consumer electronics and semiconductors.
Asian rivals may eventually catch up, but it will take longer than it did in consumer electronics, says Mizuho Investors Securities analyst Akiko Yamaga. “The hurdle for latecomers is higher for electronic parts, especially in high-function products.”
“To be sure, demand is growing for cheaper electronic parts due to high-volume sales of affordable gadgets and appliances in China and other emerging economies. But at the same time, advanced gadgets such as smartphones are lifting demand for high-quality components; and this is where more Japanese players are expected to remain competitive,” says Ms. Yamaga.
Meanwhile, the Japanese companies also have U.S. competitors.
Ian Clelland (VP/General Manager of ITW Paktron) notes that “According to a recent Japanese marketing article, Japan controls (50%) of the world capacitor production, roughly $8 Billion.” These are the big players. Lots of consumer-related products are driving this demand. In contrast, US capacitor production is very niche oriented, very small and generally higher tech (Telecom /Military/etc.) The US share is approximate $2 Billion for capacitors.
Bourns' Resistive Products product marketing manager Cathal Sheehan says the market for resistors enjoyed a significant rebound in 2010 with all manufacturers seeing revenue increases year-on-year. However, because there is still an element of uncertainty about the world economy, Sheehan remains cautious about continued growth and its outlook for Q4 2010 and 2011. For this reason, production run rates have been increased in a prudent manner and lead times have stayed quite high over the past nine months. The growth in the market for electronics in renewable energy generators, electricity grid and electric vehicles has translated into an increase in demand for resistors required for current measurement or overvoltage protection. Therefore, Bourns' outlook for high current and high power resistors over the next five years remains quite positive.
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