Rika Denshi: Precision probes for semiconductor testing

Can you give us your take of the state of play of the Japanese semiconductor industry and what is the key contribution that Japan brings?

We mainly do precision work for electric parts called the semiconductor testing industry and some additional sockets and probe cards.  Many factors contribute to the rapidly changing semiconductor device requirements such as transmissions, communications, IoT, 5G, including our devices like iPhones, iPads, laptops, and much more. Apple launches a new machine every year, which was not happening 10 years ago and with such rapid growth, the device requirements are becoming tougher and tougher. We are never in front of the consumers, but the testing that we do is significant because without it manufacturers will not be able to deliver their products to end consumers.  We take pride in that, and our challenge is to constantly and rapidly catch up or even go beyond the required technologies. We want to be always ready for the next technology that comes. I really do agree that Japanese technologies have been recognised much less than before; Japanese firms are now in a different field that is rather more difficult to see from the consumers’ end. However, I think that we have potential.    

One of the biggest trends in the semiconductor industry is the need to package smaller dies in ever smaller spaces; in fact, one could say that semiconductor development is governed solely by this trend towards miniaturisation with new 3D packaging capabilities ensuring shorter connections which improved overall electrical performance and functionality. Could you tell us how your company is adapting to this trend? What technologies have you developed in relation to this?

Yes, miniaturisation is the biggest thing.  We have been quite successful with what we call the fine pitch solutions; when the pitch is narrower it means that the contact in devices is smaller. I am not going to say that we are the leading probe manufacturers, but I do believe that we are doing well with the few varieties of solutions and with the quality. The assembly has to be done by hand because fine pitch is thinner than a strand of human hair. My employees are so good at it. Considering the size of what they have to work with, a small single gust of air can pose a difficulty.

I think that is really Japan-ish, you know what I mean? We are still competitive over Chinese or Korean manufacturers in the field of fine pitch. The larger ones are obviously much cheaper and much faster to make. Also, we are now more competitive at high frequency 5G devices.

If we look at the breakdown of your business, we can say that you are involved in the design, production, and testing of equipment for semiconductors. For example, you have jigs which are used for the evaluation; you have liquid crystal panel production capabilities; substrate design; and probe cards for the front-end testing; as well as IC sockets and inspection probes for the back end. Among these divisions, which is the main focus for your business? Please tell us too about the synergies that you have been able to create between these distinct divisions.

You are right in saying that there are so many companies that have a specialisation. We believe that it is important to fully understand the wants, the purposes, and even the dreams of our customers. The sales team or some engineers gather this kind of information by talking to our customers or doing research. Thereafter, the acquired information is incorporated into the design of a product that can fulfil and go beyond what the customers require. It is totally different to make the design according to the customers’ requests as against simply basing it on the order or spec sheet. In addition, we manufacture based on how our customers are going to be using the product. We always want to be a company that provides products that go beyond our customers’ expectations. In order to do that, we need to have all three divisions connected.

The Japanese try to focus on precision in manufacturing and they tend to forget the purpose of the customers. It is still one of my challenges, and something that is yet to change in my company.  We can customise features that we think are best for the customers. As professionals, we provide a counterproposal that shows an option that our customers may not have thought about. I think that having all those front-to-end processes in one company is very important to achieve that.

Could you tell us more about how you are looking to diversify? Which industries or sectors do you see your technologies applying to in the future?

The future can be divided into four different matrices. It could be the existing market with the existing product that will certainly continue. The second could be the existing market with a new product. The third is the new market with the existing product. Lastly, the new market with a new product. If we talk about these, there are numerous things that we can do for the four scopes. Personally, I want to look more into the last one – the new market and a new product, because it is more about creation of the future. However, the existing market is still significantly important. A new product here for us can be fine pitch which can be used for high-current 5G transmissions and also for automotive applications. We do see that the automotive market is going to be huge, but we have not been too successful in it yet. That is definitely our aim and our challenge. It will be either the high current products for automotive devices or the high-frequency products for transmissions and car electronics like IoT cars. 

The semiconductor industry is the defining industry of this era; what was before the PC-centric and mobile era is now the chip or data era. Earlier, you mentioned the importance of your engineers and sales team being out in the field and understanding the customers, in a sense, we could say that that is almost like your Research and Development. Can you tell us more about your R&D strategy? What products are you focusing your development on?

We are now focusing on high-frequency and high-current products and our R&D team has been trying to increase the megahertz measure of our high frequency products. In addition to the R&D team, I have my direct team - the Business Development team. They are expected to build a new business, at the same time, they need to do more strategic research on the existing business and with this new function, our R&D team is also changing. There is one particular example I would like to share with you. We have only two R&D workers in the entire company and one of them is very young, and he was working on a 0.4-millimetre pitch high-frequency probe because the smallest pitch we currently have is the 0.5-millimetre pitch. We then asked him about the potential market for the product or if the 0.4-millimetre pitch is what our customers are really looking for. He had no idea but became more motivated to do his research. I assured him that he can continue or stop developing the product based on a concrete reason; now, he is more confident in pursuing the development of the 0.4-millimetre pitch. 

This kind of communication was never done before because they mostly followed the road map which shows the linear vision. Naturally, after 0.5, the next will be 0.4 until 0.1. The technology now is very complicated in which the customers’ needs cannot be simply measured by the linear roadmap. Sometimes, maybe we should be working on other automotive matters before doing the 0.4-millimetre pitch. There is always a need to look at the technology requirements with a broader perspective and prioritise the things that we need to work on. The engineering mindset has to change from the old era of Japanese emerging technology. The old era was totally correct in following the road map because back then, the world was still growing, and Japanese companies kept on establishing new technologies; they were new innovators to the world. Now, everything including the requirements and needs is so diverse and complex – we need more awareness of what is going on in the world. My understanding about the Japanese manufacturing company is that the salespeople talk to the customers and relay the information back to the engineers, but I don’t think that it is a process that will last long in order to become a competitive company in the world. I strongly believe that engineers must be at the forefront of directly talking to the customers to be more competitive.

I was in Silicon Valley a few years back, in most companies their engineers have the highest wage, and they are the most valued people. I totally agree with that as their performance and recognition for being in the front line is tremendous compared to Japan, therefore, I want to make gradual changes in my company. When I hire new engineers, I consider those who have dreams of becoming more recognised and wanting to directly sell their own products to the customers. 

With Japan’s shrinking population, there are fewer graduates from the pool of potential candidates to recruit from. What is your company doing in order to attract young graduates and make them know that this is a good place to start a career? What strategies are you adopting?

I am extremely passionate about recruitment and human development. Our manufacturing company utilises technology, but overall, what we do is done by people; without them, nothing is achievable. My philosophy about management is to focus on people. Unlike Sony, we are a company that is not recognised by everybody.  First of all, it is important to have access to the students. I am quite confident that if they get to know us and our unique points, we can provide something attractive to them. I guess the easiest way to say it is I am closer to their age, and if nothing happens, I will probably still be around 30 to 40 years from now. It will be the era in which these students can become the major performers. I think I have the advantage of appealing to young graduates about working together, and I am committed to finding their strengths as demonstrated by how much time we spend interviewing students to find out about their philosophies. Sadly, Japan’s job-hunting industry is killing the young talents. I am very disappointed about this. The closed mindset of Japan is the reason why I decided to go to high school in California. Nowadays, I think it has become even worse. Maybe parents are wanting more secure jobs rather than a challenging life for their children. They are under so much pressure. Their words in interviews do not hold much power because they have prepared beforehand, just as the job-hunting industry tells them to.  Everyone is forced to go along like robots.

Goen means red strings in Japanese, and it could also pertain to a meeting by chance or having a connection to someone you have just met. I cherish and take the most importance in goen. When students display a slight interest in us and they happen to be at our company on a particular day, it is a goen. Among those goen, we are looking for the stronger goen who will work with us. My philosophy is I am really thankful, even for today of course, to whoever I get to meet among the millions of people in the world, and I feel that it is my responsibility to give a tiny bit of positive substance to that person. From the moment they step into the office, I want to make them more excited about their lives as they step out of the office. Whether they end up working with us or not, it is my job to do that.

Since you do not make the end-products - the wafers and chips - you must collaborate with other companies in order to do the testing or production. What role does co-creation or collaboration play in your R&D or your business?

Certainly, collaboration is significant to companies like us. We do manufacture all the components, like for the probe, we manufacture everything except for the spring that comes from a partner company. Spring manufacturing is unique in that it requires experience and know-how. The old-school Japanese thinking would be for us to go for establishing a new spring line or acquiring a spring company. I am not saying that it is a bad thing, but the current gigantic Japanese manufacturing companies have been growing that way. They have been trying to do everything in-house. It is like a gigantic cruise ship which is so comfortable and stable against incoming waves, but sometimes cannot avoid the sudden big iceberg, then the Titanic sinks. Our strength and that of other SMEs is being a small motor ship that can easily go anywhere. When it comes to partnerships, we have a group of ships together where sometimes the members change – it is very flexible. I think this way Japanese manufacturing companies can continue to live on in this world. If 99.5% of Japanese SMEs can be like that, Japanese manufacturing can be so strong again. I am not trying to take over the spring company’s job, I respect them so much, and I want to support them as well. Japanese SMEs like us have been wired to the huge cruise ship, which is the customer, and like a small boat we don’t have an engine or a motor, but that cruise ship pulls us along. We should not be like that; we must have our own engine or motor and be on the same level when communicating.  We should bring values to each other as professionals.

I was around 29 when I visited one of our customers, a big firm in Japan. I met some of the directors who were in their 50s. I told them, “We are professionals. We want to be open with you because to make a future, you and I need to work together to make our dream come true. Of course, we are here to support you, but we are not just here to listen to you, but to co-create the best with you.” I hope to make good partnerships, whether with suppliers or customers, where both of us put everything and discuss how to create a better future together.  I don’t support the Japanese culture of being polite to the customers but not to the suppliers. There is no border nor hierarchy; we all need to work together. If we can do that, we can make the world even better. I have much appreciation for our suppliers, and I call them partners. In reality, the customers pay us, but paying is only the result of value exchange and the reason why the money is moving is that different kinds of value are delivered to them.

You have been present in Taiwan since 1989, you have opened up in Shanghai, Singapore, and more recently in Silicon Valley in 2012. Can you tell us more about your international operation and the benefits of having these different locations?

It was my father who opened those locations. The semiconductor industry has no borders between countries, and it is not achievable without going across the borders.  Many of our products are used for our customers’ R&D in Japan or in the US, while the mass production is in Asia. I think it is natural for us to be international, but there are still so many in the Japanese manufacturing industry, who think that everything can be completed within Japan. However, this is not possible because everything is interconnected. We sometimes talk to the sector of our global customers in France or in Malaysia. Without being able to handle that kind of rapid and diverse business opportunity, we cannot be successful in this industry.

Moving forward, is there anywhere that you would like to further expand your operations to? Is there any country or region that you would like to expand to? Would you open up a factory or a sales office, or maybe even do a joint venture?

Very interesting question. I have been thinking about that for the last few years. My father established the existing facilities, and I definitely want to make my own establishment as the third generation. Aside from my personal will, I think that Europe still has a big potential particularly in the automotive industry. Most possibly, Germany is where we should be looking for the automotive and medical industry. I don’t know if opening up our own facility will be the best solution, maybe we can find a partner there who can work with us.  Asia is at some level complete and all covered because we have Singapore, Malaysia, Taiwan, Shanghai, and a manufacturing facility in Thailand. We are doing okay in Asia; our Singapore branch covers the Philippines. Of course, there is still so much potential to expand in Asia as well.

As you mentioned during the interview, you are the third generation, and you have been the President for seven years. Imagine we come back in two or three years to interview you all over again. What would you like to tell us? What are your dreams for the company, and what would you like to have accomplished by then?

Maybe three years from now, I want us to gain 150% more in revenue.  I would not say that the number of employees equates to our success story, but I would like to have people who are proud of working at Rika Denshi. I want more diversity among our people who can contribute to creating new businesses for the company to challenge in the future. Business-wise, we want to be much more successful in the automotive industry as it is a game changer with the transition to EV.