Innovative Technologies and Japan's Competitive Edge in Laser Doping

Right now is a pivotal time for Japanese makers. Policies like the US Inflation Reduction Act are forcing corporations to diversify their supply chains for reliability and to reduce country risks, with nations such as China. Japan is known for its reliability, advanced technology, and a weak JPY, so for the time being Japan has never been a more cost-effective option. This means that Japanese firms have an opportunity to expand their existing global market shares. Do you agree with this sentiment, and in your opinion, what do you believe to be the advantages of Japanese companies in this current macroeconomic environment? 

Taiwan’s biggest semiconductor manufacturer TSMC has started building their fabrication plant in Kumamoto Japan, and I think this is the right direction. Ten years ago not many people cared about geopolitical risks, but in the last few years, we’ve seen a lot of risks around the world, especially in China and in the North with the conflict between Russia and Ukraine. Compared to those countries, Japan has had significantly fewer ups and downs during the past 30 years. In fact, the last 30 years have commonly been referred to as the Lost Decades, both positively and negatively. There hasn’t been any major growth or decline. Geopolitically, Japan is seen as a safer country without any rapid price hikes or deterioration in quality. It is a lot easier for other countries to foresee what is going to happen in Japan. 

We have two factories and one distribution center in China, but in the last few years we have seen the Chinese economy in decline and their real estate is about to have a bubble burst. We have seen a lot of negative factors in the manufacturing sector. According to Chinese people, although there hasn’t been anything positive being said about China, the stock prices keep rising.

In terms of the advantages of Japan, I think it comes down to the overall stability of the country. Overall there haven’t been any sharp fluctuations in inflation although we have had long-term deflation. We also had the Bank of Japan (BOJ) announcing the reversal of negative interest rates very recently, but having said that, it won’t be like the US where we saw a rate of around 5%. Although laborers are quite diligent in Japan, the downside is that they are not able to go beyond what they are asked to do. Honestly speaking, this is a trait of almost all Japanese people. I don’t think this trait is that good a thing, but the positive is that it creates a stable environment for manufacturing. 

Japan is known worldwide for its aging population, and experts are now predicting that by 2050 the population of Japan will dip below 100 million due to low birth rates. This has created a labor crisis as well as a shrinking domestic market. From your perspective, what have been some of the challenges and opportunities you’ve seen as a result of this demographic shift, and how are you reacting to these changes? 

Here Mr.Aoki is responsible for designing our tools and he is the senior laborer. Whenever he is healthy he can work a lot. Ideally, we would like to create an environment where senior people can work actively while they are healthy. Those who worked during the bubble economy of the 1970s and 1980s have a wealth of knowledge and so we want to create a work environment where they can work as long as they are comfortable. 

We have been reducing the number of operators we have over the past five years, and in 2024 we are now down to just 70% of the operators we had in 2019 in our Japanese factory. Some of those workers just left the company by themselves spontaneously, but we also intentionally reduced others to make way for foreign trainees from China, Thailand, and Vietnam. During the pandemic, we needed to maintain production capacity without human resources so we upgraded our equipment to reduce the number of operators necessary. At the same time, we also revisited manufacturing processes so that we could produce the same volume with fewer people. 

We are not hiring new people although if a good operator becomes known we would pursue hiring them. Going forward we would like to continue shrinking the human resources in Japan while growing our capacity in factories we have in Thailand and China. We have transported equipment from Japan to China and Thailand so that we can locally produce materials. This is so that we can try and improve or enhance the quality of manufacturing in those factories. 

We started this whole initiative about five years ago by revisiting our portfolio and upgrading our equipment. That equipment began being included in our production processes around two years ago. Fortunately, we were able to purchase the equipment at a relatively good time since if we placed an order now the price would be much higher. 

Although we have cut 30% of our human resources in our Japanese factory, globally we have added 30% more capacity to production. 

To what extent do you believe you must look overseas to ensure long-term business success?

The plan is to expand our factories overseas moving forward. 

When interviewing other key players in the industry they have mentioned the importance of collaborations and co-development to create new products and unlock overseas markets. Can you tell us what role partnerships play in your business model, and are you searching for any new partnerships either domestically or overseas?

In China and Thailand, we haven’t been able to find any maker that is able to produce the same level of quality as we do. 

Where is next in terms of the international expansion of your company?

Both domestically and overseas we are looking for sales partners. In terms of locations, we haven’t looked into the US or European markets and so far we are operating only in countries where we have a presence. 

Five years ago was a key point for us, and up until that time we didn’t even have a sales division. Typically at that time, customers looked for us with their requests, but in the last mid-term plan we announced the creation of our sales division in the company so we could do our own sales activities. Going forward we are going to have opportunities to look at other markets including the US and Europe, but before doing that we want to increase our sales capabilities domestically. 

From your perspective, how do you foresee the next 12 months playing out for your company?

The Japanese economy will start recovering, so as the volume of automotive production increases the demand for cutting tools should increase as well. 

Since your foundation in 1988, you’ve grown to become a strong player within the Japanese and international market of cutting tools. You separate your activities based on different types of products and services, from super hard cutting tools to grinding and industrial machinery. Among all of the products you are handling right now, which do you believe has the most potential for future growth?  

Some of these topics may include personal wishes of mine and one of those is the high expectations I have for laser doping technology. This is going to be a requirement to achieve further success. As I mentioned, we have established production capacity for Japan, China, and Thailand. Going forward, if we have any redundant resources in those factories we would like to utilize those resources for the laser doping technology seeing as this is going to be a challenge for us. 

Your laser doping technology is a remarkable achievement, marking a pioneering advancement as the world’s first of its kind. The introduction of these technologies is designed to extend life by more than three times and addresses significant challenges in the field of cutting tool manufacturing. Could you provide some detailed insights into the specifics that led to the development of this technology? 

This laser technology employed was co-developed with the Institute of Technology in Nagoya, and the technology itself comes from the semiconductor industry. From there we developed the world’s first laser doping machine prototype to make the material of our tools much harder.

Let’s take carbide as an example, which is composed of carbonized tungsten, and cobalt. The atoms inside the carbide vibrate after being heated by a laser creating a gap between the atoms and then we apply doping material inside that gap fusing the atoms together. This creates a very anti-worn material that is difficult to tear apart. Using such a material for cutting is a good idea.

What other fields do you envision this technology being useful in? What type of clients are you targeting with this service?

We are a cutting tool company so the target should be companies looking for machining tools. However, this is a double-edged sword since if the lifespan of tools increases, our sales will decrease. Fortunately, cutting tools are just an introduction to this technology.

Think about all of the things that are made of metal. Die casts, gauges, and jigs are just tools alone that are made of metal. We’ve started with cutting tools, but in the future, we are envisioning business opportunities from other industries including the semiconductor industry. 

We are a tool maker so we understand the needs of machine tool makers, but for other industries, we don’t know what their problems are. By communicating about the performance and functionality of this tool we can find out problems from potential clients and match their needs. 

Regrind is your process for making secondhand cutting tools and an excellent service solution to bringing a second life to tools and equipment. Your ability to modify worn-out tools and bring them back to their original shape is quite impressive and unique. What specific techniques and technologies are you employing during your Regrind process to ensure high-level precision and accuracy?

When we were founded we specialized in refurbishing. In fact, for about 15 years after the foundation of the company, we were just dedicated to repolishing old tools. Repolishing or regrinding requires some unique and complicated know-how. After producing our own tools we quickly established our Regrind service.

Nowadays you can find computers attached to manufacturing machines, but when I joined this company we were just specialized in manual regrinding and there were only three operators in the factory including myself. We would wear aprons and gloves and get to work using drills to do the regrinding. 

Polishing the way you want is quite difficult and requires precise technology. We’ve built up the know-how necessary throughout our time conducting our Regrind service along with the previous refurbishment services we offered clients. Through our expertise, we can partner with companies to create tools and equipment that fit our needs. 

Imagine that we come back in four years and have this interview all over again. What goals or dreams do you hope to achieve by the time we come back for that new interview?

In the short term, we are placing our bets on our laser doping technology, however, day-to-day production processes will proceed as they do today. Laser doping is a big step ahead for us so we would like to continue pushing this technology into new and exciting avenues.  

One last thing I would like to add is regarding the laser doping technology that we have talked about today. I would like to briefly mention that although optimally the technique will increase the life of the material by two or three times, this isn’t always the case. Each material will respond to the process differently and therefore each material will have its life prolonged to a different degree. It comes down to the metal chosen for the tool. 

I think our company is like a doctor these days. We see tools and look for a diagnosis of what can be improved. From there we apply our technologies to treat the tools and improve their performance, either by applying our laser doping technology, our Regrind service, or both. This is our strength and our path to survival.