By Tatsuya Sasaki / Yomiuri Shimbun Senior WriterWhile Japan’s electronics manufacturers struggle, its electronic components industry remains healthy. What is the reason, and how will it stay strong? For this installment of Leaders, a column featuring corporate management and senior executives, The Yomiuri Shimbun put those questions to Kyocera Corp. President Hideo Tanimoto.
Our company makes a number of electronic components, foremost being those that use material called “fine ceramics.” The reason we are doing well is because the technological innovations that comprise the so-called digital revolution affect a broad range of fields.
First, the semiconductor-related business is healthier than it has nearly ever been. There is tremendous demand for semiconductor processing equipment, and [demand for] the fine ceramic components used [in such equipment is also] growing. The internet of things (IoT) collects data, and if the next-generation telecommunications standard 5G takes off, data volume will grow rapidly. Semiconductor-related businesses, relating to storage and other functions, look strong for the time being.
With the computerization of cars, growth in onboard components has been enormous. This includes displays and cameras. Up to now, there was only one camera mounted on cars, which gave a single “rear view” for checking behind the car. Now, there are more cars with “surround view,” which displays composite images to give the impression of seeing your car from above. This requires four cameras. If cameras are someday used in place of mirrors, cars will need 10 or more of them.
Cameras for self-driving cars detect people from images and help drivers avoid collisions. The cameras must detect people not only when all of their body is visible, but also when only their head appears from a hidden spot. The world is in a race to develop this field, giving it tremendous potential.
In the telecommunications field, as we look to the spread of 5G, there is intense growth anticipated in components for telecom base stations. 5G has short wavelengths, and as its waves do not travel as far as those for 4G, numerous small base stations are required. We are hoping that this will greatly expand our business.
Even with the IoT-related business, we are able to draw on knowledge from our company’s operations in the telecom equipment business, such as mobile phones. Many companies have abandoned mobile phones, and there are relatively few manufacturers in Japan besides Kyocera that can package and provide IoT devices.
Compared to the healthy state of electronic components, Japan’s general electronics makers have lost their competitive power.
I think this is due to the impact of digitization. For example, the old cassette tape and videotape machines had a lot of mechanical parts. There was demand for skill in “fine-tuning” — making a series of minute adjustments. Even if you tried to make a copy of a machine, it would quickly break. When it comes to optical discs, however, if you buy a motor and a reading device, anyone can put together a machine. It has become hard to beat places with cheap labor costs.
The evolution of electronic components and the struggle of appliance makers seems like a relationship of opposites.
On the other hand, even with advances in digitization, high-grade electronic components cannot be made easily. They still require a certain level of “fine-tuning” skills, so that knowledge will be preserved. As the digital revolution accelerates, I think the demand for state-of-the-art components will only continue to grow.
Data aids manufacturing
A big problem faced at production sites nowadays relates to the passing along of knowledge. This is due to the decline in the labor population.
Kyocera, too, became unable to maintain the same number of new hires as that of employees reaching compulsory retirement. As we depended on employees’ finely honed work site skills, there were cases where mistakes were made after an employee retired, and we received complaints from clients. It is necessary to replace work site skills with artificial intelligence and robots.
Kyocera has kept up with experiments since about five years ago. The crystal parts used in smartphones and other devices are made by melting sapphire at high temperatures, but there are hundreds of conditions including temperature. Normally these are managed by people. We ran a test to collect the data, have AI learn it, and find out what the most important conditions were. We ended up getting a result we were not expecting: voltage [was the most important condition].
Following that, the proportion of non-defective products in manufactured goods, which had been 90 percent, jumped immediately to 96 percent. If you make use of big data, you can ensure stable product quality better than a human could.
Technologies that depend on sensitivity are a separate matter, but when it comes to industrial products, you can almost always extract data. Through these efforts, I want us to double our factories’ productivity from their current levels.
From now on, in order to protect Japan’s manufacturing might, we must turn knowledge into data and store it, while making use of sensor and robot technologies, which are Japanese specialties. I also think that engineers capable of analyzing data will be vital.
Products not easily replicated
When I first set out to find a job, Japan was entering its peak in the semiconductor industry. I thought about joining a major electronics manufacturer that handled semiconductors. But after deciding that a relatively small-sized company would give me more job freedom, I joined Kyocera.
At the time I hated speaking in front of others, and thinking I could never, ever do sales, was assigned to the Sendai plant [in Kagoshima Prefecture].
When I was around 30, I was assigned a project to change the manufacturing process for making ceramic circuit boards. That was a new method that reexamined, from their very foundations, the ways of molding and firing ceramic when processing it to be as thin as paper. Through a series of struggles, we made equipment and fired up a production line. It took over three years before we hit our stride.
However, processes that once took two days to complete could be reduced to around two hours. The things made after all that work could not be easily replicated. This manufacturing process remains a major pillar of Kyocera’s business.
I yearned to be an engineer from a young age, and never thought I would become a manager. When I was asked to be president, I was honestly very surprised, but made up my mind then and there to accept the position.
Since becoming president, I’ve tried to remember something Kazuo Inamori, founder and chairman emeritus of Kyocera, taught me: “Remain humble.” I stay constantly aware of this.
Inamori is known for “amoeba management,” in which an organization is split into small units called “amoebas” and authority is granted to leaders.
Amoeba management is an excellent system for making cost management more effective, and developing a lot of people who have a sense of responsibility.
On the other hand, our company still struggles to overcome the sectionalism that comes from producing a wide range of products. Recently, as businesses like IoT that combine several technologies, such as telecommunications and electronic components, continue to spread, our sectionalism has been a problem.
With research and development, until now components were handled in the R&D Center, Kagoshima, while telecom technology was handled by the research team in the Corporate Communication Equipment Group, with no communication between the two. Starting this fiscal year, a number of people involved in telecom technology research were assigned to an organization called the Corporate R&D Group, and we have changed the way we make teams according to themes.
A tremendous challenge for Japan’s entire digital industry is to create new value by fusing the technology of strong components. The strengths of our company, which has a wide range of technologies, will be of use there, I think.
■ Hideo Tanimoto / President of Kyocera Corp.
Born in 1960. From Nagasaki Prefecture. After graduating from Sophia University’s Faculty of Science and Technology in 1982, joined Kyoto Ceramic (now Kyocera). Dedicated his career to the production of fine ceramic. Worked as general manager of the Corporate Fine Ceramics Group from 2014, bringing project sales up 10 percent in three years. Became a company executive officer in 2015, director in 2016, and has been in his current position since April 2017.
■Key Numbers: ¥2 trillion
The goal is to grow sales to ¥2 trillion in the consolidated results for March 2021. The balance for March 2018 was ¥1.577 trillion, up 10.8 percent from the previous period and a new company high. With aggressive investment for increasing production, the plan this fiscal year is to make capital investments totaling ¥110 billion in Japan and abroad, a 27 percent increase over last fiscal year. Kyocera was founded in 1959 and had 75,940 group employees as of the end of March 2018.Speech