IHS: SONY AND TOSHIBA SET TO INCREASE CHIP SPENDING IN 2013

(The following is a reformatted version of a press release
issued by iSuppli and received via electronic mail. The release
was confirmed by the sender.) 
Sony and Toshiba Set to Increase Chip Spending in 2013 as They
Strive to Recover 
El Segundo, Calif. (Dec. 5, 2012)--Despite weak financial
results, leading Japanese consumer electronics original
equipment manufacturers (OEMs) Sony Corp. and Toshiba Corp.
during the next two years are expected to increase their
semiconductor spending as they invest in a wide range of
innovative new products to revitalize their businesses. 
Sony next year is expected to purchase $8.4 billion worth of
semiconductors, up nearly 5 percent from $8.0 billion in 2012,
according to an IHS Semiconductor Spend Analysis report from
information and analytics provider IHS (NYSE: IHS). Company
spending will rise slightly again the following year by 0.1
percent. 
Meanwhile, Toshiba’s spending will increase 2.0 percent to $6.1
billion in 2013, up from $6.0 billion in 2012. Toshiba’s
spending will surge by another 6.3 percent in 2014, reaching
$6.5 billion, as presented in the figure attached. 
In contrast, spending at the other major Japanese consumer
electronics OEMs, Panasonic and Sharp, will decline in 2013 and
2014--with Panasonic enjoying a minor rebound of 2.4 percent in
2014. 
“All the Japanese consumer electronics OEMs are struggling
financially--prompting them to take measures to cut costs in
order to shore up their profits,” said Myson Robles-Bruce,
senior analyst for semiconductor spending and design activity at
IHS. “But even in these grim circumstances, Sony and Toshiba
remain optimistic about the future, and are taking steps to
invest in innovative products. This will cause their spending on
semiconductors to rise in the coming years.” 
2012 brings disaster for Japan’s CE firms 
The major Japanese consumer electronics manufacturers have been
negatively impacted by a range of different factors this year,
including economic slowdown in key markets of the world, lower
demand plaguing certain product segments, and increasingly
difficult competition from South Korean and Chinese rivals.
According to the latest financial results, Panasonic, Sony,
Toshiba and Sharp will all suffer losses this year. 
As a group, the four companies will see their revenue decline by
nearly 7 percent in 2012 compared to 2011. 
Because of its financial difficulties, Sony has issued bonds
twice this year, to raise funding. This effort comes even as the
company has had its credit rating dropped to the lowest
investment grade by Moody’s. Sony is now in the process of
eliminating 10,000 jobs by the end of its 2012 fiscal year, and
it is also selling off assets such as manufacturing plants and
shares in joint ventures. Sales estimates for its various
products lines including televisions, cameras and gaming devices
have been cut significantly for this year. 
Sony looks to the future 
However, proof that the spirit of innovation is alive and well
at Sony and Toshiba was in evidence at the October 2012 CEATEC,
Japan’s version of the Consumer Electronics Shows (CES). 
Sony at CEATEC demonstrated a wide range of products including
smartphones, tablets, PCs, cameras, televisions and home
networking and storage equipment. Some of the highlights
included the Bravia 4K liquid crystal display television (LCD
TV), and new hybrid PCs, which can be utilized as either tablets
or laptops. 
Beyond the CEATEC show, Sony has also indicated that it is
developing a new “phablet” handset device. The company is
likewise working on its PlayStation 4 game console device, which
could be released late next year. 
Toshiba moves to the cutting edge 
At CEATEC 2012, Toshiba was also on hand to showcase its latest
products, which included a 4K resolution television. Other
featured products included ultrabooks and tablets. Toshiba was
able to debut products in small, medium and large screen sizes.
Additionally, the company introduced new REGZA HDTVs, which
offer built-in DVR capability for time shifting. 
Can Japan Inc. regain consumer electronics leadership? 
IHS predicts Sony will bounce back with 3.7 percent revenue
growth in 2013. However, Toshiba will suffer another 1 percent
decline. Declines in 2013 revenue are expected at Panasonic and
Sharp as well. 
The question remains whether the current downturn will be a
long-term trend or if these companies eventually will recover
and shine once more. 
“The Japanese consumer electronics companies face a changed
marketplace, due to the rising influence of Apple and other
competitors that have redefined some of the product segments or
else simply just taken away share in key areas,” Robles-Bruce
said. “Based upon the current financial evidence, it appears as
though total revenue for Sony might be higher for next year,
although estimates for Toshiba actually show a slight decline.” 
For more information, please contact: 
Jonathan Cassell
Senior Manager, Editorial
jonathan.cassell@ihs.com
Direct: + 1 408 654 1714
Mobile: + 408 921 3754 
Or 
IHS Media Relations
press@ihs.com
+1 303 305 8021 
(bjh) NY 
#<873920.660640.3.1.0.0.76>#
 
 
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