The Communications and Information network Association of Japan (CIAJ: a general incorporated association) announces the telecommunication equipment production and trade figures for April through September, 2019 as follows.
I. Summary
The Japanese economy maintained the fourth consecutive quarter of growth, with an annual GDP growth rate of 1.8% (second preliminary report: December 9) in April through September 2019. While foreign demand continues to decline primarily due to the slowdown in overseas economies, the Japanese economy is supported by domestic demand, including an increase in consumer spending from a last-minute surge in demand before the consumption tax hike, capital expenditure and public investment.
In this economy, demand for mobile phones in the communication equipment market has been decreasing mainly due to restrained purchasing before the revision of the Telecommunications Business Act. Investment in the wireless system infrastructure is also at a low level due to the current transition to the fifth generation of mobile communications systems (5G). Meanwhile, in preparation for an increase in data traffic due to 5G commercial services and 4K/8K video distribution, demand increased for equipment related to wired system networks, the backbone.
(1) Domestic Market Trends
The domestic market value (domestic production value – export value + import value, excluding parts) amounted to 1,195.8 billion yen in the April through September period, a year-on-year decrease of 0.8%. The decrease was caused in part by a fall in total imports.
(2) Domestic production
Domestic production totaled 212.4 billion yen in April through September, a year-on-year increase of 6.5%. It was the first increase after 14 half-year periods since the first half of FY2012, thanks to growth in the domestic production of mobile phones and strong sales of equipment related to wired networks.
(3) Exports
Total exports amounted to 157.3 billion yen for April through September, which was a significant year-on-year fall of 24.5% and a continuation of the decline. Smartphone shipment in emerging countries in Asia stopped climbing and export of components for smartphone production has been sharply declining. In addition, overseas capital expenditure continues to fall due in part to trade issues, which decreased in three consecutive half-year periods.
(4) Imports
In the April through September period, total imports amounted to 1,170.2 billion yen after decreasing 3.4% year on year. While “other (transmission devices, communication devices, modems, etc.)” among data communication equipment increased due to strong wired network-related domestic demand, total imports decreased for two consecutive half-year periods as a result of a fall in mobile phones, comprising a large part of total imports, partly due to restrained purchasing.
II. Domestic market trends
(Aggregated by CIAJ based on Indices of Industrial Production and Trade Statistics of Japan)
(1) Detailed trends by categories
Actual figures by category for FY2019 first half (H1) are as follows:
The size of the domestic market has been calculated based on production statistics and trade statistics, assuming that it is the result of subtracting export value from domestic production added with import value (including import value of overseas manufacturers).
Terminal equipment
788.7 billion yen (-6.4% over the same period of the previous year)Network equipment
407.1 billion yen (+12.2% over the same period of the previous year)
III. Trends in domestic production
(Aggregated by CIAJ based on Indices of Industrial Production compiled by the Ministry of Economics, Trade and Industry)
(1) Detailed trends by categories
Actual figures by category for FY2019 H1 are as follows:
Wired terminal equipment
25.8 billion yen (+0.0% over the same period of the previous year)
This includes 1.3 billion yen for telephones (-22.2% over the same period of the previous year), 7.2 billion yen for push-button telephones (-10.9% over the same period of the previous year) and 17.3 billion yen for intercoms (+12.9% over the same period of the previous year). Personal and household products such as telephones equipped with security features and video intercoms indicate a growth trend. The downward trend of push-button telephones continues due to a decline in value of landline telephones.Mobile terminal equipment
68.6 billion yen (+11.2% over the same period of the previous year)
This includes 44.8 billion yen for mobile phones (including PHS for the public) (+7.3% over the same period of the previous year). In contrast to the restrained purchasing of smartphones manufactured overseas, mobile phones other than smartphones, such as feature phones manufactured in Japan, increased year on year.Wired network equipment
61.1 billion yen (up 15.6% over the same period of the previous year)
This includes 3.8 billion yen for central offices (-5.1% over the same period of the previous year), 3.8 billion yen for private branch exchanges (+28.8% over the same period of the previous year), 21.0 billion yen for digital transmission equipment (+24.0% over the same period of the previous year), and 29.3 billion yen (+11.5 % over the same period of the previous year) for other transmission devices. Demand for the replacement of private branch exchanges grew thanks to an increase in capital expenditure of domestic companies. Domestic production of digital transmission devices continues to grow as a result of demand for backbone systems in expectation of a rapid increase in data traffic.Wireless network equipment
25.3 billion yen (-17.6% over the same period of the previous year)
This includes 11.8 billion yen (-0.6% over the same period of the previous year) for fixed telecommunication devices and 13.4 billion yen (-28.4% over the same period of the previous year) for base station communication equipment. While demand for disaster control/commercial wireless systems for public offices and private sector and satellite communication systems for public offices is growing, demand for base station communication systems for mobile phones is sluggish and domestic production of wireless network equipment decreased year on year.Network access equipment
18.0 billion yen (+38.3% over the same period of the previous year)
Demand increased for renewal related to higher speed and improved functions in response to new services such as the commercialization of 5G networks, and domestic production of network connection equipment grew year on year.Wireline parts (includes relay equipment for wireline systems)
13.6 billion yen (-11.1% over the same period of the previous year)
Component production continues to decrease due to a fall in the export of components for smartphones manufactured overseas.
IV. Export
(Compiled by CIAJ, based on Ministry of Finance’s “Trade Statistics”)
(1) Detailed trends by category
Actual figures by category for FY2019 H1 are as follows:
Telephone sets and terminal equipment: 12.1 billion yen (-0.6% over the same period of the previous year)
This includes 10.7 billion yen for mobile phones (+1.4% Telephone sets and terminal equipment), 0.11 billion yen for cordless phones (-39.2% Telephone sets and terminal equipment), and 1.3 billion yen for other products (-9.9% Telephone sets and terminal equipment). Mobile phones for the U.S. increased significantly for eight consecutive quarters from the second quarter of FY2017, but began to decline in the second quarter of FY2019.
Network equipment: 60.0 billion yen (-4.4% over the same period of the previous year)
This includes 1.3 billion yen for base stations (-51.7% over the same period of the previous year), 56.5 billion yen for data communication equipment (-3.0% over the same period of the previous year), and 2.2 billion yen for other network-related apparatuses (+ 23.1% over the same period of the previous year). Export of data communication equipment has been sluggish due to a fall in demand caused by a slowdown in the overseas economies.
Parts (both wireline and wireless): 85.3 billion yen (-36.2% over the same period of the previous year)
A declining trend in the export of IT products, particularly components for communication equipment, has been continuing since the beginning of FY2018.
(2) Detailed trends by region
The results by region for the April through September period include 96.2 billion yen for Asia (-33.5% over the same period of the previous year), in which exports to China totaled 33.3 billion yen (-51.7% over the same period of the previous year). Exports to North America amounted to 36.0 billion yen (-5.8% over the same period of the previous year), of which exports to the U.S. totaled 35.6 billion yen (-5.4% over the same period of the previous year). Exports to Europe totaled 19.8 billion yen (+7.7% y over the same period of the previous year), of which exports to the EU amounted to 17.1 billion yen (+6.5% over the same period of the previous year).
The percentage of exports to China in total exports decreased further to 21.1% due to trade issues and a slowdown in growth in demand for smartphones.
(3) Comparison and breakdown by regions
| First: | Asia | 61.2% (-8.2% over the same period of the previous year) |
| Second: | North America | 22.9% (+4.6% over the same period of the previous year) |
| Third: | Europe | 12.6% (+3.8% over the same period of the previous year) |
| Other regions: | 3.3% (-0.2% over the same period of the previous year) |
V. Import
(Compiled by CIAJ, based on based on Ministry of Finance’s “Trade Statistics”)
(1) Detailed trends by categories
Actual figures by category for FY2019 H1 are as follows:
Telephone sets and terminal equipment: 706.4 billion yen (-8.0% over the same period of the previous year)
This includes 700.7 billion yen for mobile phones (-8.0% over the same period of the previous year), 2.3 billion yen for cordless phones (-13.4% over the same period of the previous year), and 3.3 billion yen for other products (+5.4% over the same period of the previous year). Import of smartphones from domestic and overseas manufacturers decreased chiefly due to restrained purchasing before the revision of the Telecommunications Business Act.
Network equipment: 362.7 billion yen for (+10.2% over the same period of the previous year)
This includes 20.3 billion yen for base stations (+2.7% over the same period of the previous year), 333.2 billion yen for data communication equipment (+12.1% over the same period of the previous year), and 9.2 billion yen for other network-related apparatuses (-23.9% over the same period of the previous year). Import of “other products (transmission devices, communication devices, modems, etc.)” in data communication equipment continued to rise and increased 30.9% year on year due to growth in demand for communication and network facilities.
- Parts (both wireline and wireless): 101.1 billion yen (-11.8% over the same period of the previous year)
(2) Detailed trends by region
The results by region for the April through September period include 1,087.9 billion yen from Asia (down 3.8% year on year), in which imports from China totaled 834.2 billion yen (down 7.5% year on year). Imports from North America totaled 36.1 billion yen (up 4.7% year on year), of which imports from the U.S. amounted to 34.0 billion yen (up 6.8% year on year). Imports from Europe totaled 22.7 billion yen (down 18.5% year on year), of which imports from the EU amounted to 21.9 billion yen (down 20.3% year on year).
Import of “other data communication apparatuses (transmission devices, communication devices, modems, etc.)” from Asia, Europe and North America increased.
(3) Comparison and breakdown by regions
| First: | Asia | 90.3% (-0.6% over the same period of the previous year) |
| Second: | North America | 3.1% (+0.3% over the same period of the previous year) |
| Third: | Europe | 1.9% (-0.4% over the same period of the previous year) |
| Other regions: | 2.0% (+0.7% over the same period of the previous year) |
VI. Trends in orders received and shipped
(1) FY2019 H1 actual
CIAJ statistics for total orders received and shipped in April through September amounted to 752.7 billion yen, representing an increase of 2.9% year on year. This includes 598.5 billion yen for domestic shipments, which rose by 7.8% year on year, and 154.1 billion yen for exports, which fell 12.8% year on year.
*CIAJ statistics for total orders received and shipped represent orders received and shipped by CIAJ member companies.
(The value of domestic shipments (total of domestic production and overseas production) added to the export value is the total of the domestic production value added to the import value of products manufactured overseas.)
(2) Trends by categories
Actual figures for FY2019 H1 by category are as follows:
Wired terminal equipment: 270.3 billion yen (-2.4% over the same period of the previous year)
Overall orders for wired terminal equipment received and shipped decreased year on year due to a fall in the export of personal fax machines (including multifunction personal fax machines) and business fax machines (including multifunction business fax machines) despite a steady amount of orders for cordless phones and intercoms received and shipped.
Mobile terminal equipment: 214.7 billion yen (-13.9% over the same period of the previous year)
Demand for mobile phones fell principally due to restrained purchasing. Both domestic demand for and export of other mobile terminal apparatuses (wireless systems for disaster control, commercial use, etc.) are growing.
- Wired network equipment: 102.6 billion yen (+18.6% over the same period of the previous year)
Export of push-button telephones and private branch exchanges decreased despite the level of domestic orders remaining mostly unchanged. In addition, orders for wired network-related equipment as a whole increased year on year thanks to significant growth in domestic demand for and export of digital transmission devices.
- Wireless network equipment 129.3 billion yen (+60.2% over the same period of the previous year)
Despite sluggish orders for communication devices used for mobile phone base stations, overall orders for wireless network-related equipment increased year on year thanks to significant growth in demand for disaster-control and commercial wireless systems for public offices and the private sector and satellite communication systems for public offices.
- Other network equipment: 21.5 billion yen for (+5.4% over the same period of the previous year)
Orders for LAN switches continue to rise and increase year on year despite the unchanging level of orders for routers.
- Communication equipment parts: 14.2 billion yen (-21.0% over the same period of the previous year).
