Analytical Instruments Industry

An Expert's View about Electrical, Measuring and Testing Equipment in Japan

Posted on: 31 Oct 2011

Summary
Analytical instruments play vital roles in a wide range of applications in key elements of Japan’s core manufacturing and service industries, including R&D, production, inspection and monitoring processes. Domestic demand accounts for 45% of Japanese production, with the remaining 55% exported worldwide. Imported analytical instruments account for approximately 20% of the domestic market. Most major American analytical instruments manufacturers are well established in Japan and American analytical instruments have steadily expanded their share of the overall market. In fiscal year 2010 Japan’s analytical instruments industry recovered half of the losses experienced in the preceding fiscal year after the worldwide financial crisis. The accident at the Fukushima Dai-ichi Nuclear Power Plant in the aftermath of the March 2011 earthquake and tsunami prompted a surge in demand for radiation detection and monitoring devices including dosimeters and survey meters: this demand appears to have leveled off, but is expected to remain strong. While many American firms with a long history in the market have established their own sales offices in Japan, new-to-market American firms are advised to start by partnering with local agents or distributors with industry knowledge and sales networks to market their technology and products to potential end-users in Japan.

NOTE: Unless otherwise indicated all yen-dollar calculations in this report are based on the rate of exchange of ¥87.78/$1, the average rate of exchange for 2010 as reported by the Federal Reserve Bank of New York.

Market Demand
According to the Japan Analytical Instruments Manufacturers' Association (JAIMA), the annual production of some 200 member firms in fiscal year 2010 (April 2010 - March 2011) amounted to 394.2 billion yen ($4,490 million), up 7.7% in original yen terms from the previous year. Japan’s analytical instruments industry recovered half of the losses experienced in the preceding fiscal year after the worldwide financial crises. However, the subsequent disruptions in supply chains due to the earthquake-related disaster in March 2011 are expected to have some decelerating effect on the industry’s growth.

Domestic demand accounts for 45% of Japanese production, with the remaining 55% exported worldwide. In fiscal year 2010, domestic demand leveled off from the previous year, while exports jumped by 16% after two successive years of decline. By application, analytical instruments for laboratory use, including x-ray analyzers, electron microscopes, chromatographs, mass spectrometers, spectrophotometers and thermal analyzers accounted for 51.2% of total production. Analytical instruments for medical use, including hematological analyzers and laboratory automation systems represented 37.4% of production, and analytical instruments for environmental monitoring, 4.5%. The market recovery in fiscal 2010, for the first time in three years, was led by the 12.4% growth in laboratory-use instruments, of which separation analysis apparatus increased by 17.3%, electromagnetic analyzers 13.8%, thermal analyzers and thermal measuring instruments 4.1%, electrochemical analyzers 2.1%, and related parts and accessories 31.6%.

Steadily over the past several years imported analytical instruments have accounted for approximately 20% of the domestic market. In calendar year 2010, total imports amounted to 46,539.7 million yen ($530.2 million), up 12.9% (20.4%) from 2009. Made-in-U.S.A. analytical instruments have steadily expanded their share of the overall market from 7.4% in 2008, to 8.0% in 2009, and to 8.5% in 2010.

The accident at the Fukushima Dai-ichi Nuclear Power Plant in the aftermath of the March 2011 earthquake and tsunami prompted a surge in demand for radiation detection and monitoring devices including dosimeters and survey meters from government agencies, industrial users and concerned consumers. Accordingly, three Japanese makers, Hitachi Aloka Medical, Fuji Electric, and Horiba, as well as distributors of imported brands and new Japanese makers, scrambled to meet this sudden jump in demand. As of this writing, demand appears to have leveled off. However, given the long-running effects of radioactive dispersion in and around Fukushima, demand is expected to remain strong into the future.

Best Prospects

On August 19, 2011, the Government of Japan approved the Fourth Science and Technology Basic Plan for the next five-year period (fiscal years 2011–2015), after taking into account the effects of the March 2011 earthquake, tsunami and nuclear accident. Under this Basic Plan Japan’s overall R&D spending, both public and private, is targeted at over four percent of GDP, and the government R&D budget was set at approximately 25 trillion yen ($284.8 billion), or one percent of GDP. Under this Basic Plan Japanese science and technology policies focus on four key areas:

• Recovery and restoration from the March 2011 disasters (recovery of damaged industries; infrastructure development; disaster-free safe living environment)

• Promotion of green innovation (stable energy supply; low-carbon society; higher efficiency in use of energy; smart meters; higher energy efficiency of infrastructure)

• Life innovation (innovative preventive medicine; early diagnostic detection; safe and effective medical treatment; improvement of qualify of life for the elderly, the handicapped, and medical patients)

Restructuring of policy and implementation systems for science and technology innovation (strategic promotion of science and technology innovation; strengthening of networks among industry, academia and government; creation of support environment for science and technology projects; building of regional innovation systems; strategic promotion of intellectual property and international standardization)

According to the Japanese Statistics Bureau’s 2010 Survey of Research and Development, released on December 10, 2010, Japan’s total expenditure on R&D during fiscal year 2009 (April 2009 to March 2010) amounted to 17.25 trillion yen ($196.5 billion), accounting for 3.62% of GDP (converted at 87.78 yen/USD). By sector, business enterprises spent 11.98 trillion yen ($136.5 billion), accounting for 69.5%; universities and colleges 3.55 trillion yen ($40.4 billion), 20.6%; and non-profit institutions and public organizations 1.71 trillion yen ($19.5 billion), 9.9%.

By source of funds, the non-government sector including private business was the biggest contributor at 13.68 trillion yen ($155.8 billion), accounting for 79.3%, and the central and local government sector supplied a further 3.5 trillion yen ($39.9 billion), 20.3%.

By type of research, basic research accounted for 15.0%, application research 24.2%, and development research 60.8%. By research field, life sciences accounted for 15.6%, ITC 15.5%, environment 6.0%, energy 5.6%, compounds and materials 4.2%, space exploration 1.4%, nano technology 1.1%, and oceanic development 0.6%.

Read the full market research report


Posted: 31 October 2011

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