Global Electronics Manufacturing Industry: A Focus on Micro Motors

Electronics Manufacturing has always been a pillar of the global economy, playing a key role in economic growth, employment generation, and improvement of people's livelihood. In Japan, manufacturing accounts for about 20% of employment and gross domestic product (GDP), making it the country's economic backbone¹.

However, with the changing international trends, electronics manufacturing is undergoing a major transformation towards advanced manufacturing practices, digital transformation (DX), and global optimization (GX). These trends emphasize that electronics manufacturing needs to go beyond economic efficiency and focus on overall optimization, including the use of digital technologies and the ability to meet market demand through flexible production and improved energy efficiency.

The Current State of Global Electronics Manufacturing

According to the World Bank, global electronics manufacturing value added (MVA) was $16.35 trillion in 2021², accounting for 16.35% of global GDP. Of that, China's electronics manufacturing MVA was $31.4 trillion³⁴, accounting for 29.75% of the world's total, making it the world's largest electronics manufacturing country⁵.

The Current State of the Five Major Manufacturing Regions in the World

Japan

Japanese companies have strong technical capabilities and innovation capabilities in the fields of new energy and intelligent electronics manufacturing and have strong competitiveness.

Affected by geopolitical risks, social trends, and global supply chain activities, Japanese electronics manufacturing is undergoing major changes. Data shows that Japanese manufacturing has advantages in component products, especially electronic components and automotive components. Among the varieties with a global market share of over 60%, about 70% are component materials for electronics and automobiles. However, compared with other regions such as the United States, Europe, and China, the sales revenue and market share of high-income end products (excluding automobiles) are relatively small. On the other hand, there are fewer varieties with sales of over 1 trillion yen than the United States, Europe, and China, and only automobiles and hybrid vehicles with sales of over 10 trillion yen, which are heavily dependent on the automotive industry.

China

Chinese companies are constantly improving their capabilities in electronics manufacturing and technological innovation, and have strong competitiveness.

In 44 product categories, China has a global market share of 60% or more, and in 28 product categories, sales revenue exceeds 1 trillion yen.

Among the varieties with sales revenue of over 1 trillion yen, in addition to carbon steel, automobiles, mobile phones, and electric vehicles, which have sales revenue of over 10 trillion yen, there are also electronic final products such as household air conditioners and household refrigerators. In these areas, China has a significant market share and generates substantial sales revenue. China's market share is growing in many areas, especially in the electronics, automotive, and industrial vehicles sectors. In addition, Chinese companies are also performing well in the medical and biotechnology fields, which may be related to the investment and support of the Chinese government in these areas.

the United States

American companies have strong capabilities in the high-tech and innovation fields, and have strong competitiveness.

The United States has 33 varieties with sales of over 1 trillion yen, which is the largest number in the world. The varieties with sales of over 10 trillion yen in the United States range from components to various high-end end products, from logic integrated circuits, microcontrollers, and various electronic products, to medical and pharmaceutical products, to automobiles, which shows a wide range of market presence. Among the varieties with a global market share of over 60%, about 40% are component materials for electronic systems such as logic ICs and MOS-type microcomputers. American companies are strong in the software, medical equipment, and aerospace sectors, and their market share and sales are among the leading in these fields. However, the market share of American companies in the automotive and electronics sectors has declined, which may be related to the increasing competition from companies in other countries and regions.

Europe

Among the varieties with sales of over 1 trillion yen, the ones with sales of over 10 trillion yen are automobiles, medical drugs, and carbon steel. Among the varieties with a global market share of over 60%, there are 18 automotive parts and materials products.

German companies are strong in the automotive, industrial vehicles, and machinery electronics manufacturing sectors, which shows that German companies have strong capabilities in manufacturing and technological innovation, and have strong competitiveness. However, their market share in the electronics equipment sector is relatively small.

Korean

Korean companies are strong in the electronics equipment sector, especially in the areas of smartphones, televisions, and semiconductors.

However, their market share in the automotive and machinery manufacturing sectors has declined. This may reflect the intense competition in the global market, as well as changes in consumer preferences for different products and brands.

Motors in Electronics Manufacturing

Global Market for Micro Motor

From 2017 to 2021, the market share of micro motors in major countries showed the following trends:

• China's market share has grown steadily, from 39.1% in 2017 to 41.1% in 2021, accounting for nearly half of the global market share.
• Japan's market share has declined slightly, from 41% in 2017 to 38.5% in 2021.
• The market shares of the United States, Europe, Taiwan, and South Korea have remained relatively stable.

Specific analysis is as follows:

1. The main reason for the growth of China's market share is that China is a major electronics manufacturing country in the world, and micro motors are an important basic component of manufacturing, with a large demand. In addition, the Chinese government has been vigorously promoting energy conservation and emission reduction in recent years, and has provided policy support for the promotion and application of efficient micro motors, which has also promoted the development of the micro motor industry.
2. The main reason for the decline in Japan's market share is that Japan's economic growth has slowed in recent years, and electronics manufacturing capacity has declined, reducing demand for micro motors. In addition, the Japanese micro motor manufacturing industry is facing competitive pressure from emerging markets such as China and Southeast Asia, which has also affected its market share.
3. The market shares of other countries have remained relatively stable: the micro motor industries in the United States, Europe, Taiwan, and South Korea are relatively mature, and the market competitive landscape is relatively stable.

Manufacturing digitization trends

A significant development in electronics manufacturing competitiveness assessments, particularly a shift towards advanced electronics manufacturing practices, digital transformation (DX), and global optimization (GX). The World Economic Forum's recognition of "Global Lighthouse" factories emphasizes the importance of achieving overall optimization and advanced electronics manufacturing capabilities. This marks a global trend that emphasizes the ability to capture market demand through flexible production, energy efficiency, and the use of digital technologies.

To address these changes, Japan is working to respond to the changing international trends, recognizing the need to focus on DX and GX to achieve overall optimization. The country's relatively low representation in the "Global Lighthouse" recognition, with only 2 companies and 2 sites selected, suggests that Japan needs to further emphasize advanced electronics manufacturing practices and global optimization. This shows that Japan is actively responding to emerging international trends and recognizes the importance of these factors in improving electronics manufacturing competitiveness.

World Economic Forum's Global Lighthouse Factory recognition

Japan is positioned in this context through the World Economic Forum's recognition of "Global Lighthouse" factories, which marks the country's commitment to advanced electronics manufacturing capabilities and achieving global optimization. As of January 2023, a total of 132 factories have been designated as "Global Lighthouses", with the United States leading with 18 companies and 36 sites, followed by China with 14 companies and 25 sites, and Germany with 8 companies and 14 sites. However, Japan's representation in this recognition is relatively low, with only 2 companies and 2 sites selected. This suggests that, while Japan has strengths in certain areas such as electronic components and automotive parts, there is still a need to further emphasize advanced electronics manufacturing practices and global optimization to adapt to the emerging international trends in electronics manufacturing.

Specifically, Japan needs to focus on the following areas to improve its electronics manufacturing competitiveness:

• Advanced electronics manufacturing practices: This includes areas such as lean electronics manufacturing, agile manufacturing, and Industry 4.0.
• Global optimization: This includes areas such as supply chain management, international trade, and global marketing.

By focusing on these areas, Japan can improve its electronics manufacturing competitiveness and remain a leading player in the global economy.

Source:

1 日本2023年版《制造业白皮书》节选

2 https://xueqiu.com/5296061618/225906125

3 https://www.miit.gov.cn/xwdt/szyw/art/2022/art_73e8ef1b62b14926ae503f0bfe63b289.html

4 https://www.stats.gov.cn/xxgk/jd/sjjd2020/202209/t20220915_1888243.html

5 https://www.gov.cn/xinwen/2022-06/14/content_5695609.htm