TOKYO -- Sony Group aims to sharply expand automation at its main television manufacturing base in Malaysia, turning to innovation to better compete with South Korean and Chinese rivals that have outpaced Japanese TV makers.
The plan is expected to reduce production costs there by 70% from fiscal 2018 levels by fiscal 2023.
Sony has introduced its first fully unstaffed production line at the facility outside Kuala Lumpur and will add the technology to other lines at the plant as well. It is using off-the-shelf robots but developing such key elements as control programming in-house. Full automation has been difficult because of processes that involve parts that are hard for robots to handle, according to the company.
The company is reworking the TV business from product design to the factory floor as it plays catch-up with competitors like Samsung Electronics.
Sony ranked fifth in the global market for flat-panel TVs in 2019, with its 5.4% share far behind leader Samsung Electronics' 18.7% and second-place LG Electronics' 15.2%, according to British research firm Euromonitor International. The Japanese company does have a solid presence in high-end models.
The electronics industry has been reshaped by the rise of highly efficient contract manufacturers in China and Taiwan. Though Sony has outsourced a portion of production to such companies, it intends to continue in-house manufacturing mainly for high-performance models, saying it can make products with cutting-edge technology quickly and inexpensively.
As the automation initiative moves forward at the Malaysia plant, Sony will gradually reduce the facility's workforce of thousands. Most are on limited-term contracts, which the company will stop renewing.
The plan also calls for automating audio equipment production that will be consolidated into the Kuala Lumpur facility after Sony closes its main audio equipment factory in Penang by September. Once the technology is firmly established there, the company will consider expanding it to factories elsewhere.
Many Japanese companies are grappling with rising labor costs in Southeast Asia. Annual compensation per worker, including benefits and bonuses, in Malaysia's manufacturing sector averaged $7,048 in a fiscal 2020 survey by the Japan External Trade Organization.
With factors such as U.S.-China trade frictions and the accessibility of renewable energy complicating the question of where to set up production facilities, automation technology could give manufacturers one less issue to worry about.