As one of the few manufacturers in the world that combines multiple semiconductor process technology, power supply circuit expertise and high-density packaging technologies, ShinDengen aims to fuse, develop and apply its core technologies to create products that do their part in making the low-carbon society a reality. In this interview, president, Yoshinori Suzuki, explains more about ShinDengen’s technologies and the company’s important role across a range of industries, which include mobility, energy, industrial equipment, telecommunications and home appliances.
In the past 25 years, we have seen the rise of cheaper competitors such as China, South Korea, or Taiwan, who were able to replicate the Japanese monozukuri process at a cheaper cost and overcome Japan to become B2C leaders in consumer electronics. Nevertheless, Japan has been able to maintain its leadership in the high technology field, and Shindengen is one such example. Why has Japan been able to maintain its leadership in the high-technology field? What has been the role of monozukuri in this?
It is often said that Japan has gone through the “lost two decades,” but Japan has made many innovations in several fields. As you may know, the current method airbag was created by a Japanese company in the 1960s. Japan also came up with 3D printers in the 1980s, and a radio controlling robotic vacuum cleaner in 1979. The product was discontinued because, at that time, Japanese houses used candles which increased the risk of fires. After a long time, robotic vacuum cleaners became really popular. Prototypes of smartphones and initial models of smartwatches were developed by Japanese firms. Farmers in the 1980s started using helicopter-shape drones for spraying pesticides developed by a Japanese company. Japanese companies have been concentrating on making good products that can contribute to society. Invention and innovation of technologies were their strength. Behind it, you could see the diligence and seriousness of the Japanese mindset, and I don’t think the trait is lost.
Shindengen is one such company. As the very first Japanese company, we introduced a prototype for an electric heating carpet to the market. It was named ”Menpatsu”, which unfortunately did not succeed so well as a product and went through an early withdrawal. “Ponja” was another product we invented in 1975, which opens a water tap using a person’s foot. We stopped manufacturing it when we saw no demand in the society. However, thinking of sensor-based water taps that are so common these days, we could have marketed it in a better way, for example like promoting cleanliness and sanity in hospitals. There were other unique products that we invented in the 1970s onwards, and I believe that this spirit of developing new products has been passed down in our company.
Historically, the Japanese semiconductor industry has done remarkably. From the 60s to the early 80s, Japan dominated in terms of volume and fab capacity in the field of memory such as DRAM. In the 90s to 2000s, demand for memories decreased, while large-scale integration like microcontrollers and microprocessors increased. We saw the arrival of fabless companies like Intel, and semiconductor-based companies in Taiwan revolutionised a new horizontal model for the industry which caused the volume of Japanese semiconductor devices to decrease. However, even today we still see that 30% of all semiconductor materials are made by Japan. For equipment especially for front-end processes like photomask and photoresist, about 40% are made in Japan. How do you explain this evolution? And today, how do you analyse Japan’s semiconductor field?
As you mentioned, Japan had been leading the world in terms of semiconductors. Back then, six of the Top 10 companies in this field were Japanese. Japanese companies held almost 70% of the market. Now, there is only one Japanese company in the Top 10. I personally think this happened partly because of the Japan-US economic friction. semiconductor technology, which had significant national security implications, had political ties that prevented Japanese companies from expanding sales at times. In the meantime, Korea, China, and Taiwan took over the big share. Intel took the lead in CPUs, and Japanese companies were not able to compete in that field either. Nevertheless, Japanese companies were able to survive and excel in the field of power semiconductors. Compared to memory, this field requires fine-tuning both with the equipment and the technology. It is not easy for Chinese, Taiwanese, and other companies to replicate this so far. Fine-tuning, we call it “Suriawase” in Japanese, is a concept in which designers have close communications with the production site and exchange their insights and knowledge toward one common goal of making the best product possible. This is where the Japanese have an edge compared to the others. And this is one of the reasons Shindengen has still been able to remain strong in this field.
One of the main reasons why innovation is embedded in Shindengen’s DNA is that you are one of a few manufacturers in the world who has three different areas of expertise in power electronics: semiconductor process technology, power supply circuit and mounting technology. Can you please explain more to us about these three core areas of expertise and synergies that you are able to create between them?
Our strength is the synergy obtained through those three individual technologies. The first one is the semiconductor technology, which is the elemental technology for our Electronic Device segment, to create high-efficiency power semiconductors. Second is the circuit technology, which uses power semiconductors along with other electronic parts to make high-density and high-efficient circuits. The third, the mounting technology, is to mount the components in line with the circuit to assure the particular characteristics of the circuits to be demonstrated. High heat dissipation and effective use of space also must be achieved so that the final product fits the space to be placed. We find our strength works best when our Energy Systems & Solutions Business and Car Electronics Business become clients of Electronic Device Business. For this reason, we create such a working environment that employees of each core technology can share information and form projects together to create smaller, lighter-weight, and more efficient products. Being able to develop key power semiconductors in the optimal way to form final products is one of our major advantages.
We saw in our research that you are ready to release the Gallium Nitride power module, the MG001AM. Compound semiconductors, particularly power semiconductors, are supposed to be the future as they can resolve many of the problems that Silicone semiconductors have. They can receive more power, use less energy, and less space: miniaturisation. Can you tell us a little bit more about your research in compound semiconductors? And perhaps some of your new products?
Currently, we are working on three different materials namely Silicone Carbide, Gallium Nitride, and Gallium Oxide. The Gallium Nitride power module you mentioned is under development. The module enables significant reduction of equipment power loss compared to the conventional silicon device, as well as size reduction of the heat dissipation system. Either of these mentioned materials can realize higher efficiency compared to silicon devices, but they will not wipe out the silicon devices. The switching speed can be too fast, and that makes it difficult to use for some conventional power supplies. Material selection will be made case-by-case, depending on the market requirement. I personally think that none of these materials will sell well in a discrete product. We need to make them into modules and make full use of the packaging technologies to bring out the advantages. Besides Gallium Nitride, we have invested in a small company called Novel Crystal Technology that carries out development of β-type Gallium Oxide. We expect to integrate our technology with Novel Crystal Technology’s β-type Gallium Oxide device and lead to low-loss high-current power semiconductor in lower price range. We are especially aiming towards semiconductors for industrial equipment inverters and EV drive motor inverters, which require comparatively large amounts of electrical power.
Mobility will take on a vital role in our society; nevertheless, it comes with a huge environmental impact. In fact, according to the last statistics in 2019, the transportation sector is responsible for 29% of the global CO2 emissions. For this reason, governments around the world are providing environmental regulations; and to tackle this issue, manufacturing companies are shifting to new trends like the end of combustion engines with the rise of EVs. We know that your company takes a huge amount of responsibility when it comes to the mobility industry with your DC Quick Charger for EVs. What role does Shindengen play in the mobility industry? Looking towards the future, what opportunities and challenges do you foresee in this sector?
Let me start with the challenges. There are many obstacles for all the countries in the world as for the challenge of car electrification. We have remarkable products for EV, but we need the Japanese government to really pursue EVs. Unless we set policies and the whole country goes in that direction, we will not be able to fully utilise the treasures that we have developed. With regards to EVs and FCVs, we are providing insulated DC/DC converters with our semiconductors. We also provide quick and normal EV chargers under the CHAdeMO system and are one of the leading domestic manufacturers making high power chargers. Furthermore, we concluded a license agreement with WiTricity Corporation, a U.S. company that develops wireless (contactless) power transmission technology to develop wireless power transmission technology for EVs
In Prime Minister Suga’s first speech to the parliament, he said that Japan will become a carbon-neutral society by 2050, and he committed to full decarbonization. Shindengen is converting new energy for optimal efficiency by providing total support, including solar power generation and PV inverters that utilize sunlight as energy then convert it to direct current power. Could you please tell us how your company is reacting to this announcement towards a carbon-neutral society? What is the impact of this to your businesses?
We would like to take steps together with other companies. As a parts manufacturer, we cannot do this by ourselves. We will indirectly contribute to a carbon-neutral society by creating semiconductors and units that improve energy conversion rate to the optimal level. We state this in our corporate mission, as “maximizing energy conversion efficiency for the benefit of humanity and society.”
In the last G20 in Ibaraki, Japan announced that it is the first country in terms of Society 5.0 where everything is interconnected to make our lives more comfortable and easier. This is also the concept of smart cities. How do you see the future of society?
With the establishment of the Digital Agency in Japan, the progress will be accelerated compared to the past. I think the world should become more like a smart city, but there are still many issues to be addressed. In the future, people will be able to live comfortable lives, just as Wi-Fi is now available everywhere as a matter of course. As for business, I see tremendous opportunities. If we are to be connected through IoT, we need to use more electricity than ever before, and that is where Shindengen will come into play.
Shindengen was founded in 1949 and has grown into one of Japan’s leading manufacturers of power electronics. Can you quickly run us through your company’s history and some of the technological milestones that you have developed?
Shindengen started in 1949 as a company providing selenium rectifiers, which were used by the army during World War II. Selenium has some characteristics of semiconductors, and was a forerunner of silicon semiconductors. Selenium rectifiers had developed into rectifiers for telecommunications as well as motorcycles. We also started from studying germanium diodes and transistors, which soon transferred to silicon transistors and silicon diodes. Bridge diodes, which are so commonly used in almost all power supplies now, were invented by Shindengen. Honda became our main client after we started the motorcycle business providing regulators and igniters. As I mentioned earlier, we created quite a lot of unique products around the 70s, and gradually formed them into semiconductor, power supply, and electrical component businesses.
When we interviewed the President of NTT, Mr. Sawada, in February, he mentioned that the telecommunication industry is facing many challenges, especially with the high load on their system and security risk. Dealing with these challenges, telecommunication companies are embracing new innovative technologies such as 5G, AI, IoT, and big data. Shindengen provides power supplies, which can support a stable exchange of huge amounts of data, and your power semiconductor contributes to reduction of the power consumption with such data. Can you please talk to us about the role that Shindengen plays in the telecommunication industry?
Our Energy Systems & Solutions business may not easily expand because we hear stories like reducing investment in 5G by using more software instead of hardware and base stations. In the telecommunication field, I think we might start to see more investment in services rather than infrastructure. However, as for the requirement for power semiconductors, our high-efficient high-quality products will be useful in keeping servers and other equipment that exchange huge amounts of data running without problems.
All the companies we have interviewed mentioned that R&D plays a major for their businesses. In 2019, Japan’s R&D expenditure was ¥19 trillion. Japanese companies are looking to become competitive with other countries like China, South Korea, or Taiwan; and being competitive domestically by introducing new technologies and new products. In your case, what role does R&D play for Shindengen? Do you have any upcoming products that you would like to showcase to us and to our international readers?
R&D is very important. Shindengen is not a big company and the amount of our investment is limited. But we focus on developing products that contribute to the welfare of people. The other pillar we have is to contribute to a carbon-neutral society. Therefore we are working on optimising the energy conversion. I mentioned some of our new products earlier such as Gallium Oxide. We organized a new division with young, talented engineers at our R&D center that foresees 10 years ahead. I cannot disclose what we are doing there, but we are working towards a new future.
The Philippines was your first overseas plant established in 1976; since then, you have expanded in America, Europe, and all-around Asia. More recently, in 2012, you made investments in up-and-coming markets like India and opened the first office there. Why did you decide to make these investments in India? How has it been going for the nine years since its opening?
We entered the Indian motorcycle market because we believed it was very promising and had a lot of potential. There are many local motorcycle manufacturers in India. I believe that this is a meaningful way to gain an advantage in sales expansion activities. Currently, the Indian motorcycle market is facing a temporary decline due to COVID-19, but the market is said to continuously grow up to over 20 million units per year, and we have actively invested in expanding our plants. As environmental regulations become stricter, we made major strides forward, including delivering products for the first time to two local manufacturers in India. This was responding to a growing concern on technological capabilities to meet environmental regulations. The COVID-19 made us face an uncertain future, but I believe we have gotten out of the worst of it. We are going to improve our presence in the promising Indian market continuously.
Your company is present in very developed markets like the United States, where the automotive market is innovative and geared towards greater connectivity, and also in Europe, which cares more about regulations and less power consumption. Meanwhile, you are present in emerging economies such as India. How do you ensure that the products you offer match the local demands and how do you fine-tune the products you offer?
As the market needs change, our provisions change. What is lucky about the Indian market is that they have become like the European market in terms of environmental restrictions. Shindengen is very good with environmentally-friendly products that enable us to have a good market share in the Car Electronics business, both in Europe and in India. In terms of our Electronics Device business, we are providing parts to Tier 1 and Tier 2 manufacturers as a component manufacturer. There is not much difference between regions in this way. With our edge in high-efficiency and quality, our products tend to be used more in higher-end products or products that use more electricity. But as in the Indian market, environmental regulations also have a positive effect on our business.
I have a more personal question to know you and your vision better. I hope it will still be in the very distant future, but eventually, when you leave Shindengen, what legacy would you like to leave behind? What kind of vision or objective would you like to have accomplished and to hand over to your successor and to the next generation of executives?
First thing, I aimed at changing the old-style culture and bringing a new breeze into our company. What I focused on was open communication, and I relocated our company from Hanno to Asaka. Moving the office itself would have a big impact but making sure that we get the best out of it, we used the opportunity to implement cultural and organizational changes. With an open floor plan and Wi-Fi throughout the building, the Asaka office has many meeting spaces with monitors to facilitate communication. Teams and other online platforms can facilitate sharing information and revitalize the organization. Utilizing this new environment, I want my successor to continue building a new culture within our company. I am trying, and sometimes struggle, to encourage open-mindedness and a very open atmosphere to have frank communication between the people who work here. I would like to attain that culture and leave that for the next generation. It is a challenge for a boss like me to talk to the staff and vice versa. It is my personal mission to create this flat environment.