In this interview for The Worldfolio, Mr. Yoshiyuki Fujishiro -President of Rorze- delivers a unique insight into the innovative edge of a future leader in the semiconductor manufacturing equipment industry
Critics have it that Abenomics has fallen short of expectations. Structural reforms aimed at tackling the ageing population and decreasing workforce are meant to change Japan. Confronting an aging population, experts have claimed that automatization can be the answer to Japan’s problems. How has Abenomics impacted Japan, and most particularly your sector? How can the fourth industrial revolution be a solution to Japan’s decreasing workforce?
We are located in Fukuyama where there are many other small and medium-sized companies, many of which operate on a global level, which has ensured their survival. Abenomics has not had a significant impact on our company either negatively or positively, with the exception of the foreign exchange rate which has affected. In terms of Abenomics, the government announced plans to bring factories back into Japan but we have not seen any merit or realization of that especially because we had already expanded into other countries and established a large client base. In our case, we have operated our Vietnam factory for twenty-years. I don’t think it would be a possibility for the government to fulfil that particular plan.
In terms of the fourth industrial revolution and Japan's decreasing workforce, we have already started working on a joint project with global Japanese market share leaders by providing a state-of-the-art solution that combines acoustic and acceleration sensors. The new technology allows robots to recognize the problem in advance. And the smart robot can signal the need for preventive maintenance because of the IoT technology we developed.
Japan represents the third biggest player in the world in the semi-conductor industry. According to the world semiconductor trade statics, the semiconductor industry is expected to grow drastically in the forthcoming years. According to the figures for 2015, the market was worth $24.3 billion and it is expected to grow to $31.3 billion for 2016 and $32.1 billion in 2017. How does your company take advantage of this golden opportunity of this sector?
Apple currently leads the industry, before this the driver of the growth was PC's, laptops and small devices, however, the iPhone is now the biggest driver of our growth, especially in our semiconductor equipment industry. The three major companies, Intel, Samsung and TSMC, invest huge money in new semiconductor fabs or new production lines. TSMC is one of our biggest customers and they invest a lot of money to make new fab or new lines for the iPhone.
The Rakuten president said while companies usually excel in terms of quality of production of product, sometimes they fall a little short in terms of how to commercialize the product internationally. How does your product compete against those from countries like Korea and China who have been copying the Japanese Monozukuri process in recent years and in so doing so, have not made the process better, but considerably cheaper?
We do not currently have any big competitors in Korea or Taiwan. Of course, there are many makers, but in this industry the quality is very important. Semiconductor device manufacturers make large investments for the best manufacturing equipment, that must operate 24 hours a day, 7 days a week. Therefore reliability is the most important factor to maintain high productivity and high performance. Rorze offers just that. Rorze has two strengths in terms of technology. One is the ultra-high cleanliness of our robots and the other one is reliability. One customer told me that they use Rorze products because of the high reliability.
RORZE has manufacturing centers located in Japan, Korea, Taiwan, Vietnam and in 1997, RORZE AUTOMATION, INC was established in Milpitas, CA, USA. How do these different markets vary in terms of demand? Do you have plans to expand your business participation in the US market?
Currently we make 30% of revenues in Taiwan, 20% from Japan, 20% from Korea and 10% from the United States, however, the US operation is still relatively weak. In Taiwan, we have big customers like TSMC in Taiwan, Samsung in Korea. In the US market, there is Intel, however we do not have a large amount of business with them yet. I believe we have much potential and we will grow in the US market in the near future. I do not have any plans to expand the manufacturing capability in the US, however I will pursue the organic growth of our US subsidiary.
Your company was created in 1985, today it has more than 1,000 employees and you have been involved in designing unique products for the semiconductor industry. What are the milestones that you would highlight since 1985? What are the future products or projects we will see in the near future?
Our biggest milestone was when we opened our Vietnam factories, they are currently the mother factories and manufacturer 80% to 90% of our products. Many Japanese think of Vietnam as being a low-cost region, we do not think this, the salary is now increasing and we see our Vietnam factories as a kind of a 'weapon' for us, Vietnamese employees are diligent and they have a lot of passion in their role. That is the reason why Vietnamese creates high-quality products. We started the engineering activity in Vietnam three years ago, because we wanted to create a new career path for our Vietnamese employees, currently their main role is machining parts and assembling our products, however we have to provide the opportunities for intellectual work and higher salaries. Another milestone for us was receiving the TSMC and Samsung account.
The history of our relationship with TSMC started with our Taiwanese president who lived in the same apartment of one of the TSMC guys and began a friendship. So human-to-human relationships are very important in Asia. After that we were awarded the TSMC account and the Taiwan branch grew extensively, this was another big milestone for us.
We work with many customers and receive many requests. We value our customers’ voice and many of our new products are developed through collaboration with our customers. For example, during the last two or three years, we achieved excellent financial results and one of the main reasons for this is the new product that we have launched. The development of this product began from a customer’s request. Of course their requirement was complex and so we designed it based on our knowledge and know-how of how to achieve the cleanliness and good performance of the product. They then evaluated the product and gave us a lot of feedback to improve. We continued the constructive collaboration with the customer and finally they placed a big order to us. We also have several products being developed following the discussion with key Asian customers.
At the same time, we also have internal projects, one of which is in trying to change the transferring system in the semiconductor industry, we want to bring the next innovation. Our founders invented the clean robot which was a significant achievement in the semiconductor industry. Our goal is to bring the next major innovation in the automation of the semiconductor industry. Our team is the generation that will create the next innovation in this industry.
From a managerial point of view, how do you keep that culture of innovation in your company? Where do you think the next innovation is going to come from? You said before you were innovative because you focused on reliability and cleanliness: five to ten years from now, what part of your products are going to be innovative?
We have a motto, created by our founders, which translated means “Create what is not in the world”. This is our company’s culture which is passed onto our employees. At Rorze, we have embraced this philosophy and we believe that it is our legacy to create new innovations. This is an important part of our company and something that must be continued into the forthcoming years. In terms of new products, I cannot disclose anything apart from what is happening in general in the semiconductor industry, in which we face new challenges.
For example, two or three years ago we transferred wafers into the atmosphere, but the node of the semiconductor experienced shrinkage, the same process does not like the oxygen and humidity in the air and so we use a nitrogen environment to rectify that. In the forthcoming years, we expect to see new challenges from an automation perspective and with regards to new products, you will have to wait to see what happens in the next five to ten years.
Both in the future and present, nationally and abroad there are a lot of competitors, world players, not only from the Japanese side, but also from Asia and the World, for example Brooks Automation or HIRATA are also very important and relevant players that are trying to innovate and generate new things. Would you please share with us what are the main competitive advantages of Rorze in this case and what makes you different?
We consider Brooks Automation our biggest competitor, which is based in the United States, however, they are shifting from semiconductors towards life science. Our other competitor is HIRATA who originally were an automation maker for automobiles factories. We are proud to say that we provide very high-value products. Some Asian competitors try to penetrate in the market in a low-cost strategy. However, in terms of cleanliness and reliability we perform better. Our strategy is the same, we create innovative and excellent-quality products with the highest reliability, which allows our customers to gain maximum productivity and efficiency.
Talking about excellence and quality products, in 1993 you received the Grand Prize and Excellent Product Award. In addition, RORZE CO. has also been named on the list of ‘Japan’s 300 most Vibrant Monozukuri SMEs’. Could you please share with us how you maintain this culture of excellence in your company?
We do not have any expressive strategies to maintain this standard, however, I think the answer lies in our culture and mind set for high quality, especially where our engineers are concerned. When we design a new product in our company, we do so in the Rorze way. For example, the engineer that designs a part will do so thinking about maximum quality. That mindset has an impact on the cost of operation, however, we have the same kind of understanding of what the Rorze way is. So when we create new products, we target a balanced approach that meets customer’s long-term needs, and that is the Rorze way.
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