Core Viewpoint - The article discusses the phenomenon of "involution" in China, which refers to excessive competition that is affecting the performance of Japanese companies operating in China. However, some Japanese firms are adapting by leveraging the competitive environment to enhance their global competitiveness, which they had previously diminished or exited from [2]. Group 1: Panasonic's Strategy - Panasonic's automatic door business, which started in the 1970s, exited the Japanese market in 2009 due to poor performance but found growth opportunities in China, particularly with the 2008 Beijing Olympics [5]. - The company has established a comprehensive system in China from development to manufacturing and sales, integrating reliability and safety technology from Japan with local cost competitiveness [5]. - Panasonic aims to increase its overseas sales ratio from approximately 60% to nearly 85% by 2030, targeting a position among the top three globally [6]. Group 2: Honda's Development - Honda is utilizing its Chongqing base to develop a core business for general engines, which were previously produced in Japan. The production has now shifted to Chongqing, Thailand, and India for efficiency [7]. - The Chongqing facility accounts for about 70% of the global output of general engines, benefiting from significant scale effects and digital transformation initiatives [7]. - Honda plans to replicate the successful cost competitiveness and quality improvements from its Chongqing base to other countries [7]. Group 3: Supply Chain Adaptation - Panasonic has begun transferring some functions of its global parts supplier selection to its Shanghai base, reversing the previous model of importing parts from Japan [8]. - Approximately 6,000 companies that have excelled in the competitive environment are now supplying cost-competitive parts to Panasonic's global operations [8]. - A survey indicates that the business conditions for Japanese companies in China are expected to worsen in the first half of 2025 compared to the second half of 2024, highlighting the need for Japanese firms to adapt and leverage the advantages of Chinese companies [8].

Core Insights - Fujifilm Holdings Corporation reported a slight year-on-year increase of 0.1% in sales revenue for Q1 of FY2025, reaching 749.5 billion yen, driven by strong performance in Bio CDMO, semiconductor materials, and imaging businesses, which offset adverse effects from currency fluctuations [1][2] - All business segments achieved growth in operating profit, with the imaging segment showing remarkable performance, with operating profit increasing by 21.1% to 75.3 billion yen [1][2] - Net profit attributable to Fujifilm Holdings decreased by 11.5% year-on-year to 53.8 billion yen due to foreign exchange losses [1] Business Segment Highlights Medical Health - Sales revenue was 228.5 billion yen, a slight decrease of 2.9% year-on-year, while operating profit increased by 20.7% to 4.3 billion yen [2] - The decline in sales revenue was primarily due to reduced demand for medical materials in the Chinese market [3] Bio CDMO - Sales revenue increased due to contributions from a new factory in Denmark and the resumption of operations at the Texas production facility in the U.S. [3] Life Sciences - Sales revenue improved due to a recovery in the cell culture media market and strong demand for chemical reagents [4] Electronic Materials - Sales revenue was 102.1 billion yen, a slight decrease of 0.9%, while operating profit rose by 13.0% to 22.5 billion yen [5] - Demand for advanced semiconductor materials for generative AI contributed to a 3.8% increase in sales revenue [6] Imaging - Sales revenue increased by 11.2% to 145.3 billion yen, with operating profit rising significantly by 28.4% to 41.8 billion yen [8] - Strong sales of instant imaging systems and digital cameras drove revenue growth [9][10] Commercial Innovation - Sales revenue was 273.6 billion yen, a slight decrease of 2.3%, while operating profit increased by 7.9% to 15.6 billion yen [11] - The business solutions segment benefited from increased sales related to digital transformation solutions [12] - The office solutions segment experienced a decline in sales revenue due to adjustments in the sales structure of low-margin products in the Chinese market [13]

Group 1 - The article discusses the uncertainty in international cooperation in the space sector due to the "America First" policy under the Trump administration, highlighting Musk's threat to cut off Starlink services to Ukraine [1][2] - Japan and the EU are set to collaborate on building a large-scale satellite network, aiming to launch multiple small communication satellites to reduce dependence on American companies like SpaceX [1][2] - The technology of deploying interconnected small satellites, known as "satellite constellations," is positioned as crucial for supporting digital transformation (DX) [1] Group 2 - The EU plans to construct a satellite constellation with over 290 satellites, while Japan aims to launch more than five satellites in the early 2030s, indicating a significant gap with the US and China [2] - The article mentions the potential issue of space debris due to the increasing number of satellites and discusses the possibility of Japan and the EU collaborating on this challenge [2] - The agreement includes the establishment of a "Defense Industry Dialogue" to strengthen supply chains and explore future collaboration in defense equipment development [2] Group 3 - The article notes that EU Commission President von der Leyen aims to discuss the advancement of a free trade area led by Japan and the EU [3] - Von der Leyen advocates for the creation of new trade rules based on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) [4] - The draft outcome document emphasizes the importance of adhering to international law to promote peace and prosperity in the Indo-Pacific region [4]

Core Viewpoint - The article emphasizes the growth potential of Japanese telecom operators in emerging B2B businesses and international expansion, particularly focusing on NTT's strategies and performance in these areas [1][2][3]. Group 1: Emerging Business Strategies - Japanese telecom operators, including NTT, KDDI, and Softbank, are increasingly investing in B2B services, cloud computing, and data centers, with NTT leading in international business expansion [2][3]. - NTT has established NTT DATA to manage its emerging business, which includes system integration, cloud services, and global data center services [2][3]. - NTT DATA has expanded internationally through acquisitions, including the purchase of Verio in 2000 and Dell's IT services division in 2016, and operates over 150 data centers globally with a total load exceeding 1,400 MW [2][3]. Group 2: Traditional Business and Regulatory Environment - The traditional telecom business in Japan faces significant regulatory pressures, leading to a decline in mobile ARPU, which has been decreasing since 2021 due to government calls for lower pricing [3][30]. - Japanese telecom operators are diversifying into value-added services, including digital content, lifestyle services, and financial services, to stabilize revenue amid declining ARPU [3][38]. - The regulatory environment encourages fair competition and restricts excessive pricing and subsidies, impacting the operators' pricing strategies [30][35]. Group 3: Financial Performance and Growth - NTT's revenue from global solutions, primarily B2B services, has shown a CAGR of 9% from FY20 to FY23, while traditional communication revenue has only grown at 1% [16][45]. - The overall revenue growth for Japanese telecom operators has been steady, with NTT and KDDI achieving CAGRs of 2.0% and 4.0% respectively from FY10 to FY23 [45][47]. - NTT's capital expenditure is shifting towards emerging businesses, with plans to invest approximately 12 trillion yen from FY23 to FY27, focusing on digital transformation, AI, and data centers [50][53].