Japanese Gold Plating Processing Company is Trailblazing the Circuit Board Industry

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? 

Our company mainly works on consignments, and in Japan’s manufacturing environment, there are different tiers of companies. We are positioned as a tier-3 or tier-4 company, meaning that the depreciation of the JPY is not evident and doesn’t cause that much of an impact. It does bring some advantages to tier-1 companies and exporters, but we work for those companies domestically therefore there aren’t many benefits for us directly. At the same time, right now domestically there is a lot of pressure to apply wage hikes which is something we definitely need to address even within our company. Structure-wise, since we belong to tier-3 and tier-4 we are not receiving the benefits of JPY depreciation unless tier-1 and tier-2 companies decide to implement some kind of cost-structure improvement. It means that we won’t be able to succeed or take advantage of the environment. 

Japan is the world’s oldest country, with a rapidly shrinking population due to low birth rates. In fact, experts are predicting that by 2050 Japan’s population will dip below 100 million with around 33% of people over the age of 65. This will result in issues such as a labor crisis, a shrinking domestic market, and questions regarding skill inheritance. What specific challenges and opportunities have your company seen as a result of this demographic shift and how have you been reacting to them?

Our company is situated in a rather remote area but we also have a plant in Yamagata prefecture and Tohoku. In those areas, the declining population issue seems to be more evident compared to urban areas. In fact, the pace of the population decrease is different whether it is a city center or a remote area. 

Right now the main concern we have is in recruitment, basically acquiring good talent. Leading companies have big budgets and time to recruit good talent just out of university, so even when we try to approach those students with substantial credibility it is really difficult to get them into our company. I think we are suffering the effects of this decline more prominently in the last 5-10 years. 

Although we all see the statistics, we understand that it is not easy to improve the situation overnight. One thing we believe we need to focus on more is women’s empowerment, especially in the areas of manufacturing. Shopfronts are always associated with heavy-duty work. People thought that this work was mainly for men, but I’m working to change this mentality to make the work environment more women-friendly. I am calling this my Work Reform Initiative for Men and Women's Equality in Working Environments. This is coupled with using AI technology and digital technologies. We have a DX promotion team who are trying to accelerate our efforts to implement digital technologies. Overall, I think that bringing equal work opportunities to even the sector of manufacturing is key to countering the population issue. 

In today’s world, new technologies such as 5G and cloud computing are on the rise, and here the plating industry plays a crucial role. By 2028 the global market is set to reach a valuation of over USD 2 billion. How do you see the evolution of the electronics plating industry playing out over the next 12 months?

Globally the electronics industry was hugely impacted by inventory issues due to COVID during the early part of 2022 all the way to early 2023. Companies accumulated too much inventory and a decrease in new orders along with slow times for tier-3 and tier-4 companies resulted in a significant impact to the industry as a whole. In fact, for companies that work on consignments like ours, that impact has still been felt in the first quarter of 2024. Starting in the second quarter and based on the information gathered from customers we do believe recovery can take place gradually. Based on that information, we also believe that the semiconductor and electronics sector will grow in the years to come. This is why we decided that this year is a year of capital investment. We have invested in new equipment such as chip devices. This means that we will be capable of producing machines for plating to meet upcoming needs. 

Last year we launched a new plant with the plans put in place three years ago. It was given the green light based on demand forecasts and those all pointed towards coming growth. This year we will focus on capital investment so that we will be ready to meet the orders that will start coming in 2025. 

One service you offer is gold plating processing for printed circuit boards. We understand that advanced selective plating technologies ensure precise circuit formation and prevent short circuits. Could you explain the challenges and solutions involved in achieving extraordinary fine circuit formation using electrode plating techniques? What are the advantages of electrolysis gold plating for printed circuit boards?

This explanation is quite technical so I will try to simplify it as much as I can. Electrolysis technology is used for semiconductor packaging and many companies use our key technology for things such as nano flash memory as well as some auto parts that are called ECUs or electronic control units. Additionally, our technology is also used for image censoring and CMOS sensors, which stand for complementary metal oxide semiconductors. These sensors are commonplace in devices such as smartphones, EVs, and cameras. As the electronic components used in these applications become smaller, the electronic circuit designs also become much finer. Until now, the gold plating required for mounting electronic components was formed using electroplating. In order to use electroplating, all circuits must be designed to conduct electricity, but as circuits have become smaller, it has become difficult to design to ensure electricity conduction. Gold plating using an electroless process was required.

We have pioneered a new plating material using three layers that include nickel, gold, and palladium, which gives us a competitive edge. Thanks to this plating technology we have acquired a larger share domestically. 

Can you elaborate more on the uniqueness of your new nickel, gold, and palladium plating technology?

About 20 years ago, we developed the technology for electroless plating using a three-layer structure of Ni, Pd, and Au, and began mass production. Processing using this process has been used as a plating treatment for printed circuit boards used in semiconductor package substrates. In recent years, the need for gold plating on electrodes of semiconductor chips has increased, and this three-layer plating process has been adopted. To meet this need, we are planning to install new equipment this year.

With a trading company, there are four or five companies conducting plating for semiconductor plants in Japan.  

In addition to plating, you also have precision machining and cutting services to accommodate offerings from single items to custom specifications. How do you ensure the accuracy and consistency of dimensional tolerances across different materials? 

As for processing, we do sell processing parts, but we are focusing more and more on internal machines and equipment because the plating process involves chemicals, equipment, and jigs, especially for partial plating. We want to ensure technical integrity and that is why we are trying to provide a one-stop shop internally. For tolerances, we take 3D measurements so that we can create machines that exactly match the blueprint. We make sure that everything is validated accordingly and if there is any feedback, we bring that back to the design team so that we can ensure consistency in our product internally. An advantage we possess is our ability to conduct plating activities near the customers which makes things easier when you are talking about accuracy and consistency. This system allows us to provide to our customers in the shortest amount of time possible. There are competitors that can do similar things, but they have to source some of their processes externally. Since we provide everything internally we can complete processes more quickly with higher accuracy. 

Throughout many of our interviews, we often hear how important collaboration and co-creation are to unlocking international markets and developing new products. What role do partnerships play in your business model and are you currently looking for any new partnerships in overseas markets?

As a company, we have specialized technologies and thus have been approached by overseas companies. We understand that such tie-ups may lead to expansion in Southeast Asia, but if you are asking if we are considering these partnerships right now, my answer would be no. Our technology is unique and we want to prevent leakages, and at the same time, I have seen examples of companies that have suffered as a result of their technology leaking during collaborative projects. 

In our market, tier-1 and tier-2 companies must go forth first to prepare the ground, and after that certain needs arise for companies like ourselves, creating business opportunities. We take a rather prudent approach because technology wise and machine-wise, there is a risk of such things being taken over by overseas people. If there is definitely a market existing for us to meet demand then I would like to meet such demands, but right now our efforts are concentrated in Thailand. We want to pool all of our resources and create a strong Japan-Thailand partnership, not partnerships in other places.

You’ve been in Thailand now since 2012. What are some of the advantages of having a subsidiary in Thailand?

We started our subsidiary 12 years ago but in 2011 there was a major flooding incident and we had to rebuild the plant. Around the same time, the market shifted more towards automotive but in Japan, we were focused more on consumer products. Starting in 2012 the market suddenly sprung up for Automotive and we thought this would create demand for electronic components. 

Around this time tier-1 companies started their own policies directed at local procurement. As you probably already know, Thailand is an industrialized place that is positioned as a hub for Southeast Asia. 

Particularly recently, the local procurement of automotive parts has been remarkable, with many products being transferred from Japan. In addition, recently, even new products are sometimes manufactured in Thailand from the beginning. Having a factory in Thailand also allows us to receive products transferred from Japan, and from a customer's perspective, having a plating factory with a proven track record allows us to receive preferential processing requests for new products. can. In terms of information, content that is difficult to obtain in Japan may be available through the Thai factory.

Imagine that we come back in five 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?

Right now I’m in the process of writing down the vision for my company, but in five years, I would assume that some of the social issues including the declining population will become more evident in Japan. Apart from that, if the forecast is right we expect more orders in five years time. The capital investment that we are making now will be utilized fully in five years' time. As I mentioned earlier, we are also making efforts to digitize, and we are also working on a work environment where men and women can work side by side. All of the processes we are doing will be revitalized, that is the kind of future I envision for Japan as well as Thailand.