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The Japanese electronics industry is the largest consumer electronics industry though the share of these Japanese companies gradually declined by competition from South Korea and Taiwan. Japan still has a number of companies that produce television, camcorders, audio and video players, etc.
Japanese companies have been responsible for a number of important innovations, including having pioneered the transistor radio and the Walkman (Sony), the first mass-produced laptops (Toshiba), the VHS recorder (JVC), and solar cells and LCD screens (Sharp).
Major Japanese electronics companies include Canon, Casio, Citizen, Fujifilm, Fujitsu, Hitachi, JVC Kenwood, Mitsubishi Electric, NEC, Nikon, Nintendo, Olympus, Panasonic, Pioneer, Ricoh, Seiko Group, Sharp, Sony, TDK and Toshiba.
Sony was founded in 1946 by Masaru Ibuka and Akio Morita and rapidly advanced in the electronics field. The invention of the pocket transistor radio placed the company at the forefront of electronics development, both in Japan and worldwide. As other companies were formed to compete in this area, the consumer electronics industry became major exporters that invested overseas in the 1980s. In 1991, 46.7 percent of color televisions and 87.3 percent of video cassette recorders produced in Japan were exported. The export shares of some products were too small to show separately in summary trade data, however audio tape recorders represented 2.9% of total Japanese exports in 1988, video cassette recorders 2.3 percent, radio receivers 0.8 percent, and television receivers 0.7 percent, totaling 6.7 percent.
These industries built Japan's success in developing commercial applications for the transistor in the 1950s and generations of semiconductor devices of the 1970s and 1980s. Output came from large, integrated electronics firms manufacturing semiconductor devices, consumer electronics, and computers. The companies’ international success came from continually pushing miniaturization and driving down manufacturing costs.
Japan's success overpowered the United States consumer electronics industry. Unproved charges of dumping and other predatory practices led to orderly marketing arrangements by Japan in 1977. Restraints limited the export of color televisions to 1.75 million units annually from 1977 to 1980. The agreement gave some protection to the United States' domestic industry. Japanese companies responded by investing in the United States, by the end of the 1980s, only one United States-owned television manufacturer remained. The Japanese electronic industry as a result has maintained its dominance in the market over the United States, and maintained its export strength in this field due to the high reputation of its electronics.
Japan's foreign direct investment in the consumer electronics industry was motivated by protectionism and labor costs. After three years of voluntary export restraints, seven Japanese firms located plants in the United States by 1980. Japanese firms continued production of the most technologically-advanced products especially in Japan but also U.S., while shifting production of less-advanced products to developing countries in Southeast Asia.
Since the beginning of the 21st century a number of the largest Japanese electronics companies have struggled financially and lost market share, particularly to South Korean and Taiwanese companies. Japanese companies have lost their dominant position in categories including portable media players, TVs, computers and semiconductors. Hit hard by the economic crisis of 2008 Sony, Hitachi, Panasonic, Fujitsu, Sharp, NEC and Toshiba reported losses amounting to $17 billion. By 2009, Samsung Electronics operating profit was more than two times larger than the combined operating profit of nine of Japan’s largest consumer electronic companies. The relative decline has been ascribed to factors including high costs, the value of the yen and too many Japanese companies producing the same class of products, causing a duplication in research and development efforts and reducing economies of scale and pricing power. Japan's education system has also been highlighted as a possible contributing factor.
One response to the challenges has been a rise in company mergers and acquisitions. JVC and Kenwood merged (forming JVC Kenwood Holdings), and Renesas Technology and NEC Electronics -the semiconductors arm of NEC- to merge forming Renesas Electronics. In a similar move, in 2009 Panasonic acquired a voting stock majority of Sanyo, making the latter part of the Panasonic Group. Also some of the bigger players resorted to merging some of their operations as Hitachi, Casio and NEC, and Fujitsu and Toshiba, did with their cellphone business. On 15 November 2011, facing tough competition from Samsung and LG; Sony, Toshiba and Hitachi signed a deal to merge their LCD businesses, creating a new company called Japan Display by spring 2012.
As of 2013, most Japanese companies no longer enjoy the same reputation they did about one to two decades ago. Currently, the international consumer electronics market is dominated by South Korean, Chinese and Taiwanese electronics companies. Only a few Japanese companies have significant international market share, and are well known internationally. The future of the Japanese electronics industry is debated.