The market share of Japanese electronic components has decreased by 10 percentage points over 20 years amid the rise of Chinese enterprises.

Electronic components are a traditional strength of Japanese companies. Their global market share reached 43% in 2006 but dropped to 32% in 2025. The background is the rise of companies from mainland China and Taiwan. However, there are also signs among Japanese companies of directly challenging companies from mainland China and Taiwan...

Japanese electronic components are losing market share to companies from mainland China and Taiwan. The global market share of Japanese manufacturers has declined by more than 10 percentage points in about 20 years, dropping to 32% in 2025. Some companies, such as Murata Manufacturing, are no longer limited to high - performance products and are starting to strive to regain market share in the mid - price range where companies from mainland China and Taiwan are rising.

Data released by the Japan Electronics and Information Technology Industries Association (JEITA) on May 29 showed that the shipment value of electronic components of Japanese companies (about 60 member companies) in fiscal year 2025 was 4.6198 trillion yen. It increased by 4% year - on - year, setting a new record for the second consecutive year. The demand for components for artificial intelligence (AI) servers has been the driving force for growth.

However, compared with overseas companies, the market share of Japanese electronic components is declining. According to JEITA's estimate, the global output value of electronic components in 2025 was 34.3643 trillion yen, with an average annual growth rate (CAGR) of 3.8% from 2015 to 2025. Among them, the growth rate of Japanese companies was 2.0%, lower than that of their overseas competitors.

Traditionally, Japanese companies have focused on high - end products with large profit margins and have not put much effort into mid - priced products in the mass market (Volume zone). According to JEITA data, the global market share of Japanese companies reached 43% in 2006.

The background is the rise of companies from mainland China and Taiwan. In mainland China, where manufacturing is concentrated and is known as the "world's factory", there are many assembly bases for electronic products. Driven by the large - scale production of electronic products such as smartphones, the technological strength and supply capacity have been improved.

Moreover, in 2021, China proposed a plan to strengthen the electronic component industry in its national - level policies and actively invested in subsidies. Guangdong Micro - Cap Technology, which is involved in multilayer ceramic capacitors (MLCC) for AI servers, etc., has proposed to become a world - class MLCC manufacturer.

On the other hand, Taiwan has a large number of electronics manufacturing services (EMS) industries, becoming a supply base for smartphones and personal computers, which has promoted the growth of local suppliers.

Taiwanese companies are actively involved in mergers and acquisitions (M&A), which has also promoted the increase of market share. Yageo, a large electronic component company, acquired a US counterpart in 2018 and a Japanese manufacturer, Shibaura Electronics, which is engaged in temperature sensors, in 2025.

More and more non - Japanese manufacturers are also competing in high - end products. Samsung Electro - Mechanics of South Korea, which is involved in MLCC, has also increased its presence in the high - performance product field for AI servers. Therefore, Murata Manufacturing and Taiyo Yuden have to compete with it.

Among Japanese companies, there are also signs of directly challenging companies from mainland China and Taiwan. Leading the way is Murata Manufacturing, the largest MLCC company. The strategy is to deprive companies from mainland China and Taiwan of the opportunity to accumulate technology by actively developing low - priced products. Even if this reduces the profit margin, it aims to compress the development space of overseas competitors.

Nippon Chemi - Con, which ranks first in the world in the field of aluminum electrolytic capacitors for AI servers, etc., has also set the goal of "regaining market share in general - purpose products" in its medium - term plan ending in fiscal year 2028. The company has proposed a policy to increase the proportion of overseas production and reduce the break - even point by more than 10 percentage points.

Kenichi Imano, the president of the company, believes that there is still a large technological gap between mainland China, Taiwan, and Japan, and also warns that "there is a risk that competitors may catch up with the help of their strong financial strength."

In the liquid crystal industry, although Japanese companies took the lead in the early stages of development, they soon lost their market share to companies from South Korea, mainland China, and Taiwan, which have strong investment capabilities. In the field of electronic components, if they only defend passively, they may also be gradually eroded. The electronic components, a traditional strength of Japan, have also reached a critical moment.

This article is from the WeChat official account "Nikkei Chinese Net" (ID: rijingzhongwenwang). Author: Riyu Katsumi. It is published by 36Kr with authorization.