Panasonic to enhance core business with Chinese AI

Japanese tech company Panasonic Holdings Corp is intensifying efforts to scale up investment and expand its footprint in the Chinese market, while accelerating its push for localization in areas ranging from research and development to production and sales of products, said a senior company executive.

"China is not only a manufacturing powerhouse and a major consumer country, but also an innovator with exceptional engineering talent," said Tetsuro Homma, executive vice-president of Panasonic, highlighting that China is continuously developing new technologies.

According to Homma, the company aims to enhance production efficiency in the Chinese market, with the number of R&D staff members — especially software developers — continuing to grow, and its R&D investment in the country will also keep expanding.

In the field of home appliances, Panasonic has realized localization in product design and the R&D of hardware and software, and this trend is now being extended to vehicle-mounted products and lithium batteries, which are gradually achieving localized R&D, Homma said.

Many innovative products developed in China have been exported since last year, and he believes this trend will certainly be strengthened from next year. For the global manufacturing sector, China's cost efficiency and rapid response times are worth learning from, he added.

The Japanese multinational is stepping up efforts to boost the application of artificial intelligence technology and promote China's digital transformation. Homma said the market where AI technologies are most closely integrated with people's daily lives is the Chinese market.

"On the one hand, we apply generative AI to our consumer products, such as home appliances and residential equipment. On the other hand, we provide a wide range of components and production equipment for China's infrastructure to support the development of AI technologies in the country," he said.

He noted that Panasonic's target this year is to apply Chinese AI technologies in order to transform core business areas. This involves not only product R&D, production, procurement and sales, but also improving operational speed and efficiency, as well as optimizing resource utilization.

Panasonic's business in China now accounts for about 24 percent of its global business scale. From April 2019 to the present, the company has initiated the construction and investment of 20 new bases nationwide, demonstrating its confidence in the Chinese market. Over the past year, it has been investing in electronic materials related to AI.

With an investment of 600 million yuan ($84.23 million), a new electronic materials project in Suzhou, Jiangsu province, which focuses on the semiconductor field, commenced construction in October 2024, while another new electronic materials factory in Shanghai started construction in September.

For foreign-funded enterprises, the ongoing China International Import Expo held in Shanghai provides an opportunity to understand the Chinese market and excellent opportunities for communication and exchanges.

Homma, who is also chairman of the Japanese Chamber of Commerce and Industry in China, said many Japanese companies remain interested in investing in China.

He said the results of the latest survey of Japanese companies in China, conducted by the chamber, showed that at present, more than half of the companies are either increasing their investments in or maintaining a relatively positive stance on the Chinese market, while over half of them consider China to be the most important market globally, or at least one of the top three.

China has issued an action plan aiming to stabilize foreign investment this year after the removal of all restrictions on foreign investment in the manufacturing sector last year.

Zhu Keli, founding director of the China Institute of New Economy, said the country has sent a clear signal that it is dedicated to further opening up its economy to the outside world and creating a world-class and market-oriented business environment governed by a sound legal framework.

Removing the restrictions on foreign investment in the manufacturing sector is an essential requirement of China's economic transformation and upgrading, and will attract more foreign capital inflow into high-end manufacturing, R&D and design, and help the country move up the value chain, Zhu added.