Japan Electronics Trade Deficit:

 Article Source: https://mainichi.jp/english/articles/20230219/p2g/00m/0bu/029000c

Article:

TOKYO (Kyodo) -- Japan posted a trade deficit of 81.2 billion yen ($605 million) in electronic equipment in the second half of 2022, government data showed, marking the first time on record imports have exceeded exports for a half-year period amid a decline in the competitiveness of Japanese products.

The deficit in the balance of trade in electronics also reflects a move by Japanese manufacturers to shift their production bases overseas.

The first red ink since comparable data became available in 1988 provides a stark contrast to the 1990s, when the industry propped up the nation's trade with an annual surplus of almost 8 trillion yen.

Ideas:

The trade deficit or some of it might be related not so much a lack of demand for Japanese electronic products but more related to the increase in prices of imports into Japan because of the variation in the US dollar and the Japanese yen.

I don't think Japanese products have lost competitiveness compared to Chinese or South Korean products but more related to the dollar/yen situation.

Yes Japan products are very much in competition with South Korean car, Chinese cars and other products now but it's too early to think Japanese products are losing competitiveness unless we can consider the dollar/yen situation as a major factor. 

Of course as Japanese manufactures move on and locate to other countries with better tax rates and or better logisticall locations its only natural that it's going to affect the import/export balance in Japan.

Article:

According to the Finance Ministry's trade data, exports of electronic equipment in the six months through December totaled 9.23 trillion yen, up 13.9 percent from the first six months, while imports rose 17.2 percent to 9.31 trillion yen.

Imports of semiconductors and other electronic components increased as production recovered following the coronavirus pandemic, with the yen's depreciation against the U.S. dollar also boosting imports by value.

Japan's trade balance has been on a downward trend since the late 2000s, with the global financial crisis in 2008 spurring Japanese electronics companies to move production to countries with lower production costs.

Ideas:

The 13.9 percent increase in export and 17.2 percent increase in import could again be nothing more than the dollar/yen difference which is making imports look more expensive in value compared to exports.

At the same time, as Japanese manufacturers were experiencing shortages of supplies related to semiconductors maybe now they are making up for lost time in terms of imports into Japan which again could show a variance between imports and exports.

Lets hope we won't see a major trend of shifting of Japanese manufacturing jobs to other countries or economies around the world as Japanese manufacturing and exporting is or was a major driver or was major part of the Japanese economy.

Article:

Imports of electronics in the second half of last year increased 9.1 times while exports only increased 1.8 times, compared with the second half of 1991, when Japan logged a record half-year trade surplus of 4.17 trillion yen.

Tough competition with U.S. Apple Inc.'s iPhone and other foreign brands' smartphones has also contributed to growing imports.

Among items with trade losses, communications equipment including smartphones posted a deficit of 1.79 trillion yen in the July-December period, followed by household appliances at 400.3 billion yen, and audio visual equipment 309.3 billion yen.

Ideas:

Its been said or suggested that major Japanese electronics companies have given up trying to compete with Apple and Samsung. At one the Sony rules the electronic world. 

But something happened along the way or maybe just normal business where other companies innovate and come up with better quality products.

Of course products now from China and maybe India will begin to eventually begin to affect the market share of Apple and Samsung in the future. 

As far as Japan goes, as I check out Yodobashi Camera and other electronics stores in Japan, while stores may continue to try and sell Japanese smartphones the bigger show areas or display area are related to Apple products.

At the same time as I browse through other areas there a huge selections of appliances and TVs still being sold at Yodobashi but maybe not exactly sold but just there and not really a lot of sales.

Article:

Meanwhile, semiconductors and other electronic components posted a trade surplus of 378.4 billion yen, and electric circuits and equipment 813.6 billion yen.

While some Japanese companies have been working to move production back home due to supply chain disruptions and geopolitical risks, Hiromi Oki, chief researcher at the Institute for International Trade and Investment, believes the current state of trade will not change in the future.

"Companies should instead see this as an opportunity to invest in more value-added products and strengthen technological development," Oki said.

Ideas:

Those products as mentioned above Japan might have a absolute advantage in compared to other countries and should continue to produce them.

Japan is noted for having very small electronic manufacturers which might produce one small electronic part that is exports globally to many electronic companies

If China, for example, continues to have logistics challenges along with geopolitical risks it might be wise for Japanese companies to look for better economic situations, including Japan for business.

Consumers are looking for value-added products now and any company, not just Japanese companies should make sure their product provide value that consumers want and need.

And it goes without saying companies and economies need to with increase technological as those that don't innovate will get left behind as the situation with Sony as shown.

Apple, Samsung, and other companies know they need to keep innovating or they will be left behind in the future.

Have a nice day and be safe!