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[Overview]
In the telecom market in the third quarter (October–December) of FY2024, higher unit prices, stemming from the continued depreciation of the yen and the rising cost of materials, continued to impact the market as observed in the first half of the year. However, demand for high-speed, large-capacity data traffic continued to rise, leading to a recovery trend in domestic production, particularly in digital transmission equipment, fixed-line communications equipment and network access equipment. Exports were positive for the first time in six quarters, supported by certain overseas carriers expanding their networks. Imports were increased by increased shipments of smartphones and data telecom equipment produced by foreign manufacturers.
(1) Domestic Market Trends
The domestic market value (domestic production value – export value + import value, excluding components) amounted to 1,359.9 billion yen in the October through December period, a year-on-year increase of 8.1%. The rise was driven by the growth of domestic production of digital transmission equipment and increased imports of smartphones and data telecom equipment.
(2) Domestic Production Trends
Domestic production totaled 93.2 billion yen in October through December, a year-on-year decrease of 2.4%. Although production of digital transmission equipment and fixed-line communications equipment grew, supported by steady demand related to disaster prevention-related applications, other equipment categories remained weak, resulting in an overall decline in domestic production value.
(3) Export Trends
Actual orders received and shipped in the October through December period was 88.5 billion yen, up 2.1% year-on-year. Data telecom equipment, including digital transmission equipment, performed well and contributed to the increase of export value.
(4) Import Trends
In the October through December period, total imports amounted to 1,355.1 billion yen, a 6.9% increase year on year. Domestic demand for smartphones remained strong this quarter, supported not only by the launch of new models from major overseas manufacturers in the fall, but also by a last-minute surge in purchases ahead of the revisions to the Ministry of Internal Affairs and Communications’ guidelines on smartphone discounts. Data telecom equipment also grew, driven by the expansion of networks and increased investment in response to rising demand for data centers.
[Orders Received and Shipped by Japan-based CIAJ Member Companies]
Orders received and shipped came to 327.6 billion yen, up 20.4% year on year. Of which the total value of domestic shipments totaled 254.7 billion yen, an increase of 16.2% over the same quarter of the previous year and exports were 72.9 billion yen, an increase of 37.7% over the same quarter of the previous year.
While mobile terminal equipment and wireline network equipment declined, wireline terminal equipment and wireless network equipment increased, resulting in the overall growth of domestic shipments. Notably, demand for fixed-line communications equipment, under wireless network equipment, generated by government agencies rose sharply, supported by disaster prevention-related budgets which have been secured. Exports rose significantly, led by a strong performance in facsimile machines and digital transmission equipment.
