Top News 5 Page  1   2    Ahead of Others in Storage Media    There are three major categories in digital consumer electronics, and there is attention being placed on Japanese manufacturers for their grip on related technology in each of the categories.    The first is display technology. Cathode-ray tubes (CRTs) for television and PC display use are on their way to being replaced by LCDs and PDPs, which are thinner and lighter. Although Japanese makers have been overtaken in the LCD field by Taiwanese and Korean manufacturers, it should be noted that the majority of the manufacturing equipment for LCD being used is of Japanese make, even in Korea and Taiwan. Meanwhile, Japan dominates more than a 90 percent share of the world market in PDP. Organic light emitting diode (OLED) displays (also known as electroluminescence display or OELD) is thought to be a potential post-LCD technology. Although OLED technology was developed with Eastman Kodak Co. at the center, only Japanese manufacturers have so far succeeded in mass production of OLED products.    The second category is storage technology. There is rapid growth being marked by DVD recorders (which utilize optical disk drives) and HDD recorders (which use hard disk drives) as a replacement of the VCR. Japan has led the world throughout in DVDs, from the development of basic technology to the establishment of standards. Good showing among Japanese companies in relation to HDDs are also highly visible, including the acquisition of IBM Corporation's HDD business by Hitachi, Ltd. Digital cameras are also closely related to storage technology.    The third category is digital communications technology. Japan is the only country in the world where the new-generation communications technologies of digital broadcasting, third generation (3G) mobile phones, and ADSL are in practical use. Because of this, products such as digital receivers, mobile phones capable of high-speed data transmissions, and ADSL modems, are the least expensive in the world while also boasting high quality. Key Components Manufactured Domestically in Japan and Assembled in China    Mass production techniques were in the background of Japan's past world domination as a consumer electronics giant. Today, however, Chinese products have caught up in terms of performance, and Japanese products are at an overwhelming disadvantage in terms of price.    Japanese manufacturers developed digital technologies as a successor to its mass production techniques. It had been forecasted more than a dozen years ago that cathode-ray tubes would be eventually be replaced by flat-screen displays; that VCRs would be replaced by disks; and that transmission speeds would accelerate. Through the efforts of Japanese manufacturers, these next-generation technologies have finally been commercialized at prices that are within the consumer reach. The current digital home electronics boom can be said to have occurred as a result of this.    On top of this is the fact that unlike home appliances of the past, digital consumer electronics is a field that Japan will not be easily edged out of by overseas manufacturers. For example, while Chinese manufacturers also mass produce DVD players, these products cannot be assembled without the import of many of the key components from Japan. Therefore, it is a mechanism that will always bring a fixed return to Japanese companies. This is the basis for the outlook that the boom in digital consumer electronics will not end as a short-lived fad but will lead the Japanese economy over a long period of time.    The basic strategy for Japanese consumer electronics makers from now on will be to manufacture key components in Japan and assemble them in China. Canon Inc. blazed a trail in this sense.    Canon transferred its mass production plant for office equipment, such as copiers, to China early on and succeeded in securing profits. Key components are either manufactured in Japan or procured from other makers. The company will be taking this strategy further by increasing the proportion of key components that are manufactured in-house. There are many other companies that are focusing their domestic plants to the manufacture of key components. This is not a strategy to "overcome" China, but rather a strategy to prevent handing everything over to China.    However, companies are recently starting to go one step further. That is, this strategic move is now taking on the light of maintaining innovative manufacturing technologies. A domestic production plant makes it possible to manufacture a product in tandem with development, and it also makes it easier to produce critical components and manufacturing equipment in-house. It also enables the promotion of streamlining by centralizing the dispersed production sites both within and outside Japan. The other side of the coin is that companies are starting to think that over-dependence on overseas manufacturing could potentially lead to the loss of the competitive edge in development, something that is really essential, even in a field like digital consumer electronics products. One can see the direction that Japanese manufacturing will be taking in the future through this trend towards a return of manufacturing bases to Japan.