Risk of production impacts from electronic component shortages and extended lead times

「Although signs of recovery were seen in the automotive and machine-tool sectors, uncertainty remained over the supply of production materials due to concerns about energy supplies arising from the escalating situation in the Middle East and the impact of international conditions. As a result, performance during the period remained generally weak.」

「In the Chubu region, automotive-related business remains sluggish, while activity in steel-related equipment repairs has increased. Manufacturing equipment makers and the semiconductor-related sector, which has also remained sluggish, have begun to show a gradual increase in orders.」

「In the Chubu region, automotive-related business remains sluggish, while activity in steel-related equipment repairs has increased. Manufacturing equipment makers and the semiconductor-related sector, which has also remained sluggish, have begun to show a gradual increase in orders.」

「However, overall corporate performance remains resilient, with signs of a recovery in production activity, led by export-related companies such as automakers that have benefited from yen depreciation, as well as a rebound in production following the easing of semiconductor shortages.」

「In the western region, inventory adjustments in the semiconductor industry are still continuing and are generally expected to become more active from around next autumn. However, signs of recovery are gradually emerging in areas including the automotive sector.」

「Meanwhile, concerns about an overseas-led economic slowdown continue, amid the prolonged conflict in Ukraine and economic sanctions against Russia, the impact of yen depreciation due to widening interest-rate differentials between Japan and the United States, globally elevated resource and raw material prices, and lower production activity caused by supply constraints and logistics disruptions, although the latter have eased somewhat. In the western region, inventory adjustments in the semiconductor-related sector continue, and orders have declined from their previous level. However, users' capital investment has generally remained healthy, and the ability to obtain information effectively has translated into results, with conditions overall remaining firm.」

「In the central region, capital investment for the production of EV (electric vehicle) components is increasing, but semiconductor shortages persist, and production activity in the steel and automotive industries has yet to return to full strength. Higher energy costs are also beginning to affect production activity.」

「In the eastern region, shortages of components for the heavily affected automotive industry are beginning to ease, but stable supply has yet to be restored, and productivity has not recovered to pre-pandemic levels. In the central region, automotive companies continue to face lower production plans, partly due to semiconductor shortages, while soaring fuel and material prices continue to pressure corporate profits. Although activity has not yet returned to normal, conditions remained firm, supported by numerous orders for capital investment projects from companies including those in the semiconductor and electronics industries. In the western region, the semiconductor and machine tool industries underwent production adjustments, but conditions overall continued to recover.」

「In the central region, the recovery in automotive production has been delayed partly because of supply constraints for components, including semiconductors, caused by the COVID-19 pandemic. Automotive manufacturers continue to adjust production, and component manufacturers, including Tier 1 and Tier 2 suppliers, likewise remain stalled. In the western region, industries related to semiconductors and secondary batteries were performing well, but product flows have slowed due to shortages of various components, including semiconductors and electronic components. In addition, higher raw material prices resulting from overseas conditions and foreign-exchange issues have led industries across the board to focus on concerns about profitability, and conditions overall remained sluggish.」

「In the western region, many manufacturers have experienced delays in supplier lead times due to semiconductor shortages and the impact of the Shanghai lockdown, and our company was also affected. Although activity in the semiconductor and machine tool industries remained firm, conditions overall were sluggish.」

「In the western region, food-related businesses remained sluggish due to the effects of COVID-19 and soaring raw material and crude oil prices. Shortages of semiconductors and raw materials are also affecting production systems across a range of industries.」

「In the central region, production activity has been recovering as conditions improve following the COVID-19 pandemic. Capital investment, particularly in the semiconductor and electronic component industries, is continuing, and signs of recovery are also emerging in the steel and automotive industries. However, difficulties obtaining products, particularly electronic components, continue to be a concern, although conditions overall remained strong.」

「Concerns are growing that the impact of infectious diseases on supply chains and the effects of semiconductor shortages, as well as downside risks to overseas economies, could become apparent across a broad range of industries, including the automotive sector. In the central region, the situation remains highly unstable, with large-scale production adjustments and delays in component arrivals due to semiconductor shortages and lockdowns overseas. At the same time, shortages of materials and components have intensified across industries. Although there are many negative factors, conditions overall remained strong.」

「In the eastern region, operating rates at semiconductor companies and equipment manufacturers have risen, but shortages and longer lead times for components, particularly electronic components, have begun to emerge at various manufacturers. This has started to affect production at manufacturing sites, including those in the steelmaking, chemical plant and automotive industries, creating uncertainty about the outlook, although conditions overall remained firm.」