The largest Japanese electronic component suppliers reported record profits for the fiscal year ending in March 2022. However, as the pandemic-induced boom turned into a recession, market participants are now placing their bets on the electric vehicle (EV) segment.
By March of the next year, Japan's eight largest electronics suppliers expect an 8% increase in consolidated net income, reaching $6 billion for the first time in two years. Kyocera representatives anticipate a 13% growth in net profit, primarily attributed to the automotive sector. Nidec, TDK, Nitto Denko, and Alps Alpine also hope for a recovery in positive earnings trends.
TDK projects a 29% growth in bottom-line performance, driven by strong demand for multilayer ceramic capacitors and magnetic sensors. The company sees significant growth potential in the EV segment, excluding battery technology. Nidec, a manufacturer of electric traction motors, also expects to achieve record profits this fiscal year, fueled by strong demand for its E-Axle powerplants.
The five largest electronic component suppliers in Japan experienced a 22% revenue increase in the automotive sector during the last fiscal year. This type of activity accounted for 24% of their revenue structure, representing a three-percentage-point increase. Global sales of electric vehicles surpassed 10 million units last year and are projected to reach 14 million units this year, as stated by the International Energy Agency.
However, not all suppliers share the same positive outlook. Murata, a major supplier of ceramic capacitors, anticipates a 30% decline in net income due to the smartphone market's troubles outweighing potential gains from the growing EV market. Rival company Taiyo Yuden also expects a 66% decrease in net income. Murata's management predicts it will take several years for the smartphone market to recover to an annual volume of 1.3 million units following the current crisis.