Japanese Electronics Industry Sees 2% Rise in Production : Manufacturing: Trade group projects ’95 total will reach $21.7 billion. But recovery is still slow.

Production by Japan’s electronics companies will rise by 2% next year as improving world economies spur demand for electronic products, an industry association said.

The Electronic Industries Assn. of Japan, which represents 600 Japanese electronics makers, said total electronics production in 1995 will likely reach $21.7 billion, up 2.2% on the year, led by strong demand for mobile communications systems and semiconductors.

However, the association said that increased imports, the shifting of production to overseas sites and slower economic growth rates in the United States and China will keep the recovery sluggish.

“We can only say this is a slight recovery for the electronics industry,” said Tamotsu Harada, a spokesman for the EIAJ.

Japan’s 30-month recession, which forced companies and consumers to cut back on purchases of electronic equipment, as well the strength of the Japanese yen that has made Japan’s products expensive overseas, have led many companies to locate production facilities overseas to keep costs down. Electronics production in Japan has fallen by about 20% since 1991.

The projected rise in production will be led by semiconductors and liquid crystal displays, EIAJ said. Production of LCDs, which are used as display screens in portable computers, will likely rise 29.5% next year on the year, following an increase this year of 38.4%. Semiconductor production will rise 7.5% next year.

Demand in both Japan and the United States for computers and the semiconductor chips that make them work is soaring as economies recover and companies invest in new technology. This translates into increased business for companies like NEC Corp., Japan’s top semiconductor maker and the nation’s No. 2 computer manufacturer, and leading semiconductor fabrication equipment suppliers.

Production of home electronic appliances like videocassette recorders and audio equipment has been the hardest hit by the long recession in Japan. The EIAJ said output of these products will fall 5.3% next year, following a drop this year of 9.7% and a plunge last year of 14.2%.

Leading electronics makers in Japan have recently raised their profit forecasts for the coming business year on the strength of improving world markets.