Funai Electric, last VHS maker on Earth, went bankrupt with ¥82B in debt

Funai Electric was founded in 1961 in Daitō, Osaka, and grew into one of the world's largest producers of video equipment. By 1990 it was Japan's largest maker of two-head mono VHS recorders. In 1997 it became the first company to sell a VHS VCR below $100 in North America; in 2001 it did the same with DVD players. At peak it produced over two million flat-panel televisions a year for Black Friday sales and was the main electronics supplier to Walmart and Sam's Club. Revenue reached ¥246 billion in 2012.

Funai's model was OEM and licensed-brand manufacturing: it made televisions and players sold under Philips, Magnavox, Emerson, Sanyo, Sharp and Toshiba names. It never built meaningful demand for its own brand. When Chinese manufacturers achieved the same assembly quality at lower cost, Funai's clients moved their orders. A 2013 attempt to acquire Philips' global consumer electronics licence failed when Philips terminated the deal for breach of contract. Funai was delisted from the Tokyo Stock Exchange in August 2021.

On 24 October 2024, a director — a relative of the founder — filed a quasi-bankruptcy proposal at the Tokyo District Court without a board resolution. The court approved it the same day. Approximately 530 employees were laid off immediately; wages due the next day went initially unpaid. By April 2025, liabilities stood at ¥81.9 billion ($554 million) against ¥1.4 billion in assets. The Philips North American TV business and Funai's Japanese repair network were sold to China's Skyworth Group.

Funai kept only the factory, not the customer; when a cheaper assembler appeared, orders moved and ¥81.9B in debt was left behind.

OEM manufacturing for other brands meant Funai owned the factory but not the customer — when a cheaper factory appeared, the customer moved and nothing held it

Every format transition (VHS to DVD to LCD) was competed on price, and Funai's strategy was always to be the cheapest assembler, not to move up the value chain

The failed 2013 Philips acquisition was the last realistic path to owning a global brand, and its collapse left Funai with no strategic alternative

Revenue peaked at ¥246 billion in 2012 and then fell for a decade — the decline was visible long before the bankruptcy, but no pivot was attempted

If your customer can name your competitor's factory and it is cheaper than yours, you do not have a business — you have a contract that has not yet been cancelled.