Electronic manufacturing services (EMS) have been gaining traction and Japanese EMS companies are riding the waves. They have been increasing production and expanding their portfolio at their respective facilities in Southeast Asia.

Because of the COVID-19 pandemic, manufacturers are revisiting their business continuity plans (BCP), making EMS companies becoming more important.

China’s manufacturing industry has somehow overcome the threats of COVID-19 pandemic. Production activities have resurfaced particularly in electric vehicles, communications, semiconductors social infrastructure, and factory automation (FA) equipment.

The renewed potentials of the manufacturing industry have enabled Japanese EMS companies to see steady increase in production.

Strengthens Overseas Bases

SIIX Corporation’s EMS business targets wide range of electronics fields, centering on automotive electronics and industrial equipment, and encompassing information and communications equipment and consumer equipment. The company has production bases in Kanagawa Prefecture in Japan and Dongguan, Hubei, and Shanghai in China. It also has bases in Samutprakan in Thailand; Batam and West Java in Indonesia; the Philippines; San Luis Potosi in Mexico; Nagykőrös in Hungary, and Nitra in Slovakia.  The company is also deploying joint ventures with China’s Media Group in Shuntak and Hefei.      

This year, SIIX will launch businesses with leading Japanese customers in Shanghai and Dongguan in China, and in Mexico. It also completed in September the construction of factory No. 2 in Karawang in Indonesia for automotive electronics-related equipment. 

Katolec Corporation deploys EMS business and logistics business, and EMS business accounts for 70 percent of the company’s sales. The company has production bases at its headquarters in Takamatsu and in Matsuyama both in Japan. It also has bases in Suzhou and Guangdong in China and in Tijuana and Guanajuato in Mexico as well as in Vietnam, Malaysia, Thailand, Indonesia, and the Philippines.

Katolec has installed factory No. 2 building at its plant in Vietnam, expanding the total floor area to about 36,000sq.m, increasing the production capacity of the plant. The plant in Indonesia started operations in 1993 as the Katolec group’s first overseas EMS base. Providing a wide range of services from the mounting of printed circuit boards to the assembly of finished products, the plant expanded and installed factory No. 3 building. It also recently completed factory No. 4, expanding the plant’s total floor area to 22,000sq.m.

The company also commenced in June factory No. 3 in the Philippines, expanding plant’s total floor area in the country to 17,130sq.m.

Distributors Expand EMS Business, Too

Electronics trading companies have also been expanding EMS business. Aside from Japan, Kaga Electronics Co., Ltd. has production bases in China, other parts of Asia, as well as in Europe and Americas. The company has been expanding its EMS business to provide design and development of products, high-mix, small-lot production, and various applications. The company positions the EMS business as the driver of its growth and has been expanding production bases to meet requirements of increasing number of customers in Japan and other countries. To expand the production capacity of its EMS business in inland China, the company completed a new plant in Dec. 2020 in Xiaogan in Hubei Province. Xiaogan is adjacent to Wuhan, which is home to manufacturers of automotive supply chain.

Tokyo Electron Device LTD. (TED) reinvents its business structure that functions as a manufacturer and a trading company of electronic components at the same time. This includes semiconductors, electronic devices, and private brand business, with computer network as its main business.

The company strengthens manufacturing to transform itself to an original design manufacturer (ODM) to manufacture of finished products. In addition, the company has relocated the plant of TED Nagasaki Limited, a group company, which develops, designs, manufactures, and sells electronic devices to bolster its capacity. It is also strengthening manufacturing, targeting to implement smart factory of the next generation. 

Other Players Expand Business

Iida Electronics (Tsusho) Co., Ltd. deployed EMS business ahead of other electronics traders.  The company established in 1992 a manufacturing company in Dongguan in China, and in 2013, the plants in Thailand and Myanmar. To expand its EMS business, the company has been distributing manufacturing that was overconcentrated in China to Southeast Asian countries, shifting to a system centering around Thailand to incorporate customers’ needs. 

The Thai plant executes PCB mounting and bonding of liquid crystal panels in the ISO14644 Class 7 clean room. It aims for a manufacturing level at par with Japan quality.  The clean room installs FUJI Corporation’s NXTⅢ high-density mounting machine. It operates seven lines with a total production capacity of 500 million shots per month. It receives increasing outsourcing requests mainly from customers in communications-related equipment. 

Rexxam Co., Ltd. deploys diverse businesses, including automated optical inspection (AOI) systems, EMS, and semiconductor-related businesses, and has been bolstering its production system worldwide. In addition to Kagawa and Ehime in Japan, the company is conducting production activities in Suzhou, Shenzhen, Dongguan, Anning and Kunming in China. It also has presence in Thailand and Czech Republic. 

The company has been installing advanced mounters that support small surface mount components, primarily, multilayer ceramic capacitors (MLCCs), in the mounting lines of its main overseas bases in Suzhou and Shenzhen, China. Since 2020, the new plant in Thailand has been operating on full scale.