Since 1950, Osaka Vacuum has been supplying pump systems that satisfy customers’ advanced needs for production processes, analysis, and R&D. The company’s products include various pump applications, with the turbo-molecular pump currently its main product for the overseas semiconductor and electronic parts manufacturing market. We spoke to president Kazuyuki Kasaoka to learn more about the company and its technologies.
How do you define monozukuri, the Japanese manufacturing spirit?
As an industrial pump manufacturer, our focus is to maintain the high quality of all our products and extend their applications to various industries.
Osaka Vacuum, established in 1950, has a long and illustrious history. What have been some of the key milestones?
While we didn’t have any subsidiaries at first, we do now. We have expanded our business. It is common in the Japanese vacuum industry for sales to go up and down, and we hit our first peak thanks to the TH25000. It was the world's largest turbo molecular pump and was used for the national project in nuclear power plant development in Japan – a project that we were able to respond to. The next increases we experienced were in relation to 4 to 6-inch semiconductors, 8-inch semiconductors, plasma TVs, hard disks, 12-inch semiconductors, and now smartphones. This trajectory shows our company’s growth. While we started as a device manufacturer, which, for example, Tokyo Electron is famous for, our strategy is to focus on our pumps and their components. Among these, turbo molecular pumps such as the TGkine®, TG-M and TG-F series are some of the products we are pushing right now.
Japan has the world’s oldest population, with one in three people expected to be over 65 in ten years’ time. As well as shrinking the domestic market, this also reduces the pool of talented young graduates. What are you doing to adapt to this population decline?
We are greatly impacted by the population issue. Due to the shrinking of the domestic market, we are turning our attention to the international market, which accounts for more than 40% of our direct sales. Moreover, we are suppliers to major device companies, for example Tokyo Electron. Around 70% of our overseas exports are pumps and their devices. We are currently thinking about how to respond to the shrinking labour force. We have been producing in Shanghai for quite some time; however, it has been a great challenge for us to convey the quality that we require and strive for to our workers in that factory. While we may write using the same Chinese characters, real mutual understanding is difficult to achieve because of differences in mindset and culture. To address this, we have decided to commission a part of the pump component and maintenance work to our Chinese factory, while conducting the main assembly in our Japanese factory. Overall, we are carefully considering how to secure the labour force within Japan.
Your products include turbopumps for ultra-high vacuum applications, roots vacuum pumps, oil-sealed vacuum pumps, and liquid-ring vacuum pumps. Which pumps are you focusing on to expand your sales abroad?
The turbo-molecular pump is our main product for the overseas market because the other types of pumps can be produced locally by companies in China, India and others that prefer to work with their domestic end users. Japanese pumps that are especially competitive are turbo-molecular pumps, dry pumps, and cryopumps, the dry pumps being produced and exported by Ebara and the cryopumps being produced and exported by Ulvac, Japan’s biggest vacuum maker, and Sumitomo.
What are the competitive advantages of your turbo-molecular pump?
Allow me to give you an overview of the turbopump industry. European manufacturers in Germany and England have their sites in Czechoslovakia and a company in France, and their products are used mainly for analysis. China, instead, manufactures pumps used for general industrial purposes within its borders. On the other hand, Japanese pumps are used for semiconductors and many types of electric devices.
In general, Japanese and European companies share the pie in the global pump industry. Twenty years ago, Chinese products were very cheap, but now prices are increasing, and at the same time, product performance is improving. On account of this, Japanese and European companies are able to enter the Chinese market because there isn’t much of a price difference between their products. Shimadzu, our excellent competitor in Japan, as well as French and German companies certainly produce quality pumps. And our products also stand out because our strength is the high performance of our machines.
My father founded the company. He was an aeroplane engineer during World War II and after the war he wanted to utilise his knowledge in technology and started manufacturing oil-sealed rotary vacuum pumps. By the way, Shimadzu has various business fields in which they deal with chemical and medical aspects, whereas our background is more grounded in the mechanical side. We respect them for being a very well-established company with stable technologies.
Turbo molecular pump
You collaborated with the High Energy Accelerator Research Organization (KEK) headed by Nobel Prize winner Makoto Kobayashi for the improvement of the pump down performance by applying Pd (palladium) and Pd/Ti (palladium/titanium). Could you tell us more about this project?
We are particularly strong in the ultra-high vacuum region and this project was a study to improve the exhaust performance in the high vacuum region. The aim was to improve the pump down performance by applying Pd and Pd/Ti coating on the inner surface of a test chamber and measuring the pumping down time. In fact, compared to the pump down time without coating, the pump down with Pd coating took only 14 percent of the time and the pump down with Pd/Ti coating took only 19 percent, and the base pressure was also improved with Pd/Ti coating. In addition, the pumping down performance remained the same even after the coatings were exposed to the atmosphere repeatedly. Thanks to the innovative concept of coatings, the pump down time of a vacuum system can be significantly reduced, which will also have positive effects on productivity. These coatings are expected to be useful for applications such as accelerators, space chambers, electron microscopes, photoelectron spectrometers or any general vacuum systems.
Japanese companies are famous for providing a niche technology in collaboration with overseas companies. For example, Japanese firm YDK is working with British domestic vacuum maker, Dyson, supplying high-efficiency motors. Are you looking for overseas partners to combine your know-how with in creating new technologies?
We have collaborated with European companies in the past but failed twice. This is because European companies tend to be acquired via M&As: when a new president takes over and changes everything, that ends the business relationship. Due to such sudden changes, which result in the collaboration being turned upside down, we don’t want to risk pursuing this strategy anymore. Having said that, we don’t reject collaboration, but before embarking on it, we need to ascertain that the company we work with has a stable management.
Osaka Vacuum's four key technologies are ultra-high vacuum, high-speed rotation, fluid mechanics, and active magnetic control. With these in mind, what are some of the latest products you have developed?
In the context of our company’s capacity and the fact that we don’t conduct systematic research and development, we develop new products as an extension of our work. We listen to our customer's needs and respond to them. Whenever we have a peak in sales, this allows us to advance our research and development.
Your vacuum pumps are used in semiconductor production, a market worth $480 billion that is expected to grow to $1 trillion by 2030 – and one that can’t keep up with growing demand as evidenced by the worldwide chip shortage during the height of the Coronavirus pandemic. What strategies are you putting in place to reap the benefits of this growth?
The semiconductor industry has the biggest potential for our products. For example, iPhones ask users to send data to iCloud every two weeks, and this process uses semiconductors. I’m certain that there will be an increasing amount of data science applied in electronics and devices, and our pumps will surely serve this industry well.
Osaka Vacuum has been in the US since 1991, Korea since 1996, and Shanghai starting from 2001. Moving forward, what new locations offer the most potential? What strategy will you adopt to expand there?
We have many branches across the globe. In 1991, we set up a branch in the US and established a subsidiary company there in 2005. However, our strategy isn’t to expand and enlarge our business globally given the costs of having another branch. Instead, we want to take advantage of our close relationships with other companies. The companies that we work closely with have branches in Europe and other locations and we do direct dealings with their local companies, as well as their main companies in Japan. If we were to expand directly, we would have to overcome legal issues, as well as linguistic and cultural barriers. Our strategy is to maintain what we have now and seek direct dealings with agents in each area. At the moment, our offices cover Europe, South Korea, China and Taiwan. We are aiming to work together with agents and closely related companies to expand to other countries.
As a family-owned business, of which you are the second-generation president, you produced a document for your 70th anniversary in 2020. What was the reasoning behind this?
Osaka Vacuum’s founder, my father, didn’t leave a document outlining the company’s philosophy. This created the potential for directors and employees to have different understandings of the company’s philosophy and mission. Therefore, by looking back at 70 years on historical case studies, we documented our founder’s philosophy and produced the 70th anniversary document. The document was written with the purpose of passing the company’s philosophy and culture down to the next generations. As Japan is a country stemming from Chinese culture and that utilises Chinese characters, I organised the 70th anniversary document as a story by utilising the famous Confucius essay section.
If we were to come back to interview you again three years from now, what would you like to tell us? What are your dreams for the company?
Our basic company philosophy and strategy won’t change, as we want to continue manufacturing vacuum components and vacuum systems. Our vacuum business is an essential technology, but it isn’t a big business. It is not a good idea to increase the scale of business aiming for the global market by ourselves. Looking to the future, my role as the president is to improve the company’s stable footing in Japan as the vacuum pump specialist catering to East Asian countries and North America. We plan to tackle the global market by collaborating with good quality partners who require vacuum technologies, rather than those who think of their vacuum business as an addition. Our aim is to find companies with a stable management background that aren’t interested in M&As.
In the past, the Japanese government’s policy of keeping domestic technologies and companies within Japan failed: around 20 years ago, China was very attractive for manufacturing because it was cheap, and many Japanese companies took their technologies to China and elsewhere. However, Japan is now facing a decline, and its currency is depreciating, while the Chinese currency is appreciating. There has been a significant shift. Even within the vacuum industry, many of our competitors have lost their edge because they don't provide products that can compete with international manufacturers selling at a cheaper cost. We are one of the few who have a competitive advantage, and our goal is to retain that.
We think that a business should be assessed for its long-term performance; short-term profits often hinder medium to long-term company progress and innovations in vacuum technologies. We want to expand, but not excessively so as not to compromise our company’s stability. “Cut your coat according to your cloth”: this saying is very important for our vacuum business.
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