Market Monitor - ICT industry - Japan

Market Monitor

  • Japan
  • Electronics/ICT

16th June 2016

In 2016, growth in the Japanese ICT sector is expected to be modest at 0.9%, due to market saturation and a low economic growth forecast of 0.6%.

  • In 2016, growth in the Japanese ICT sector is expected to be modest at 0.9%, due to market saturation and a low economic growth forecast of 0.6%. A return to higher growth rates is expected in the medium term.
  • The IT hardware segment is expected to contract due to saturation, longer replacement rates and migration to cloud services. However, cloud services and software development are expected to grow in 2016. Growth and profits in the telecommunications segment are expected to remain stable over the coming 12 months.
  • Competition in the market is very high with Japan being the second largest IT market in the Asia Pacific region after China. The market is dominated by large companies such as Fujitsu, NEC, Toshiba, NTT Data and Hitachi.
  • ICT companies obtain finance easily as banks are very willing to lend and interest rates are low. The current government is very supportive of bank lending, putting pressure on banks to even lend to weaker companies. Therefore, high gearing ratios are common in Japan.
  • On average, payments in the ICT industry take between 30 and 90 days. The business culture in Japan promotes prompt payment, and therefore the number of protracted payments is low. The insolvency level in the ICT sector is low and no major increase is expected in 2016.
  • Our underwriting stance for this industry is generally open due to stable growth and margin outlook, the low insolvency level and good payment experience.
Disclaimer

Each publication available on or from our websites, such as, but not limited to webpages, reports, articles, publications, tips and helpful content, trading briefs, infographics, videos (each a “Publication”) is provided for information purposes only and is not intended as a recommendation or advice as to particular transactions, investments or strategies in any way to any reader. Readers must make their own independent decisions, commercial or otherwise, regarding the information provided. While we have made every attempt to ensure that the information contained in any Publication has been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in any Publication is provided ’as is’, with no guarantee of completeness, accuracy, timeliness or of the results obtained from its use, and without warranty of any kind, express or implied. In no event will Atradius, its related partnerships or corporations, or the partners, agents or employees thereof, be liable to you or anyone else for any decision made or action taken in reliance on the information in any Publication, or for any loss of opportunity, loss of profit, loss of production, loss of business or indirect losses, special or similar damages of any kind, even if advised of the possibility of such losses or damages.