“I’ve read about their huge losses in the newspaper,” Asuka Okamoto, a physics graduate student at Waseda University in Tokyo, said of the electronics makers. “I’d rather work somewhere else if workers seem worried at those companies.”

As Japan’s biggest companies kick off their annual campus recruitment drives this month, science students are increasingly favouring companies like Meiji Holdings, a Tokyo-based dairy maker. For the once-dominant electronics makers, a loss of market share to Samsung Electronics and Apple also means they’re losing future engineers and scientists needed to come up with hit products that can revive their brands.

“The gap between Japanese companies and Samsung, LG, and Chinese or Taiwanese competitors may only widen if the Japanese can’t hire excellent young talent,” said Yoshihisa Toyosaki, an analyst at Architect Grand Design, an electronics research and consulting company in Tokyo. “New products can only be born from new brains.”

Two of the three most popular employers for science students entering the job market next year are food manufacturers, according to Mynavi, an operator of job-hunting websites, which collected data from 16,451 students in the three months ended February.

Meiji topped the rankings, followed by Toshiba, which makes products ranging from personal computers to nuclear reactors. Kagome, a maker of sauces and condiments, was third.

“Japan’s top manufacturers are being replaced by food makers in the rankings because the food business is considered stable,” Mynavi’s Kurita said. Science students, he said, “care about building a career at a stable company where they can work as researcher for a long time.”

In Japan, where many students accept job offers from large companies six months before graduating and may stay with the same employer until retirement, the nation’s unprofitable consumer-electronics makers are seen as volatile, said Yoshihide Suzuki, an administrative director at the career center at Waseda, a 130-year-old private school where Sony’s co-founder Masaru Ibuka studied engineering in the 1930s. That has made them less attractive to young job-seekers whose priorities include stability, he said.

Meiji shares have gained 14 per cent this year, and its net income more than doubled to 5.2 billion yen (US$63 million) in the six months ended September 30 from a year earlier, according to Bloomberg data.

Kagome, maker of ketchup and tomato juice, has risen 7.9 per cent as its net income gained 88 per cent to 5.7 billion yen in the same period.

Meiji, which traces its history to 1906, has been profitable since its creation by a 2009 merger. The Tokyo-based company has expanded its workforce by 8 per cent since 2010, according to Bloomberg data.

The company is receiving a “very large number of applicants” this season, Emiko Kurokawa, a spokeswoman for Meiji, said, without giving details.

The maker of Aya ice cream and Bulgaria Yogurt is hiring engineers for its plants and scientists for research and development. The company also makes pharmaceuticals, veterinary drugs and agricultural chemicals.

Sony, Panasonic and Sharp Corp. are recruiting fewer young people as they shrink their workforce. The three companies have announced a total of more than 29,800 job cuts for the year ending March 31 as they try to recover from 1.6 trillion yen in combined net losses last fiscal year.

Sony, which used to hire as many as 1,000 people from universities each year, plans to give jobs to just 180 in April, said George Boyd, a spokesman. That’s down 35 percent from a year earlier and the lowest since 1990, he said. The number of engineers being hired will drop to 150 from 205 this year.

The Tokyo-based maker of Bravia TVs, which posted a 457 billion-yen loss for the year ended March 31, was the most popular destination for science students for 10 straight years until 2003, according to Mynavi.

“Students don’t seem to believe entering Sony will secure anything for their lives,” said Waseda’s Suzuki.

Sony continues to hold recruiting events at universities and elsewhere and offers students opportunities to visit development sites and talk to company engineers, Boyd said.

Panasonic plans to hire 350 people from universities next year, compared with 1,400 in 1992, said Chieko Gyobu, a spokeswoman. Panasonic, which posted a 772 billion-yen loss last fiscal year, tumbled to 15th in Mynavi’s latest rankings, released in March, from the No. 1 spot a year earlier.

Panasonic is holding seminars on campuses and at its own offices “to secure applications from talented students” and is also strengthening its design, development and marketing operations overseas, Gyobu said.

“Although it’s true we’re facing difficulties after a big loss, we’re not going to continue declining,” Panasonic Vice Chairman Masayuki Matsushita said in a November 26 interview. “Joining us now can actually be an opportunity to succeed.”

Sharp, which posted a 376 billion- yen loss last fiscal year and said November 1 there was “material doubt” about its ability to survive, plans to hire 130 workers, compared with 240 last year, said Miyuki Nakayama, a spokeswoman. Sharp, which fell to 23rd from 16th in Mynavi’s latest ranking, is also recruiting on campuses, Nakayama said.

Samsung, the world’s biggest maker of TVs and mobile phones, doesn’t disclose its hiring practices. Samsung Group, its parent company, said in February it plans to hire 9,000 university graduates this year.

Most students in Japan start job hunting December 1, or about 16 months prior to graduation. Companies can start contacting students that day under guidelines issued by the Keidanren, Japan’s largest business lobby.

Japan’s jobless rate fell to 4.2 per cent in October from 4.4 per cent a year earlier, according to data compiled by Bloomberg. That’s lower than the 7.7 per cent rate in the US and 6.9 per cent in Germany. Unemployment was 3 per cent in South Korea, and the rate for China in September was 4.1 per cent.

Sony paid a salary of 242,500 yen a month for new recruits who obtained a master’s degree in 2012, and 210,000 yen for those with a bachelor’s degree, according to the company’s website. Panasonic and Sharp each paid 228,500 yen for new hires who got a master’s degree that year, according to the companies.

Meiji’s pharmaceuticals unit paid 240,000 yen for recruits with a master’s degree this year, while Toyota Motor Corp., Japan’s biggest carmaker, paid 225,000 yen, according to the companies’ websites.

Yuki Okuyama, a 23-year-old physics student at the Tokyo Institute of Technology, said he’s interested in working with chipmaking equipment or infrastructure.

“I’ll probably check consumer electronics makers as well, though they seem to be troubled,” he said. Sony, Panasonic and Sharp “relied on a limited area of businesses and stumbled,” he said. “It would have been better if they had diversified.”