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S-Takaya: An integrated company for OSAT that can offer a one-stop service

Interview - January 12, 2023

Founded in 1979 as part of a joint venture between Sharp Corporation and Takaya Corporation, S-Takaya Electronics Industry Co., Ltd. (STEC) is a trusted provider of outsourced semiconductor assembly and testing (OSAT), catering to clients in both the Japanese and international markets.


Can you give us an introduction to S-Takaya and your business operations?

S-Takaya Electronics Industry Company was founded in August 1979, with our current capital being JPY100 million, but our capital at our establishment was JPY 250 million. Sales last fiscal year (FY2021) were approximately JPY 14 billion. We have about 520 employees and our main businesses are OSAT (outsourced semiconductor assembly and test) of LSI (large-scale integration) device & modules, manufacturing and sales of semiconductor manufacturing equipment, research and development of radar modules and environmental-related products. When we were founded in 1979, we were an affiliated company for the semiconductor business of Sharp Corporation.

This company was a joint venture between Sharp and Takaya Corporation. We started with manufacturing plastic packages and wafer tests. In the 1990s, we started getting paid for the chip, which caused our sales to increase. We manufactured various packages such as TCP, COB, CCD, CSP and SOF, and that was a period of growth for our company. In the 2000s, we increased our capital to JPY 310 million and we started manufacturing camera modules, which caused us to grow rapidly to JPY 200 billion sales (280 billion at max in 2003) and it became one of our core businesses.  Also, in addition to package technologies such as WLCSP, we built manufacturing technologies such as camera units and camera modules.

In 2007, we established production sites in Binh Duong province, Vietnam (the factory is called SAIGON STEC) and they started operations in 2008, producing camera modules, helping to produce cost-effectively.

The 2010s was a challenging period, however. During that time, we entered the international market and produced our camera modules globally. Since we transferred the production of camera modules overseas, the production volume domestically decreased and hence, we thought about our next core production for the domestic market and decided to develop radar modules. After that, we brought our company to the next stage with the OSAT (Outsourced Semiconductor Assembly and Test) business. We believed that the semiconductor industry would grow again in Japan, so we kept OSAT as our core, while also continuing development of the radar module business for potential growth. We also started an engineering business in overseas markets for manufacturing equipment. The SAIGON STEC is the base of that development (engineering business). The focus on growing sales in SAIGON STEC, as well as focusing on the OSAT business, continuing the development of radar modules, and starting the engineering business in Vietnam all helped us to overcome the challenges we had in the 2010s.

In 2018, we transferred 51% of the SAIGON STEC capital to Sharp. In exchange, we were able to buy back 40% of our shares from Sharp in 2020 and we changed our corporate name from Sharp Takaya Electronics Industry Co., Ltd. to S-Takaya Electronics Industry Co., Ltd. The “S” in our name stands for many things, such as the initials of the place where the company was founded “Satosho”, and the history with Sharp.

There are three business divisions – R&D, EMS (electronics manufacturing services), and engineering. The EMS division handles the OSAT business, including LSI devices and modules and semiconductor package manufacturing. The R&D division handles radar modules, and the engineering division handles the manufacturing equipment. In addition, the corporate development division handles environmental-related products. EMS is the core business, R&D is for innovation, and engineering is for profitability.

With our OSAT business, we provide a one-stop service with our unique technology. The different processes in semiconductor production include wafer testing, dicing, polishing, bonding, encapsulating, molding and final test. Our advantage is being able to offer all these in a one-stop service. Also, we can handle various types of packages such as COF, Plastic package and BGA. COF (chip on film) is used as a driver for the liquid crystal displays. The plastic package is applied for general-purpose LSI. BGA (ball grid arrays) and FBGA (Fine-pitch BGA) are used for various products like logic ICs, while image sensors are used for cameras. We also manufactured peripheral components for camera modules that are used for smartphones. We started with manufacturing packages, then we advanced our technology to produce image sensors in camera modules and we were able to grow our business this way. The rest is chip test and wafer processing for power semiconductors such as IGBT (insulated-gate bipolar transistor) and MOSFET (Metal-Oxide-Semiconductor Field-Effect Transistor) with this item being our new project. Additionally, we offer reliability tests with various testing equipment.

The R&D division provides a one-stop service from development to mass production of the radar module. Radar has been around for a long time, but we are focusing on millimeter wave radar now because millimeter waves are starting to draw attention, especially in the automotive sector. We wanted to advance this technology, so we started with the design and manufacturing. Recently, radar technology is not only applied in automotives, but also used with the measurement of distance and angles and vital signs. Millimeter wave radar has characteristics to detect distance, angle, and vital signs and the radar is well-known for its use in autonomous driving. However, we believe that these characteristics could be used in various scenarios in our daily lives. For example, we can use it to detect the water surface level of a river to prevent flooding. Also, we can use it to detect vital signs in a car so that we can avoid leaving somebody in a car. We are trying to use radar technology to produce sensor fusion. This was based on camera module technology combined with the newer radar module technology.

In the engineering division, we listen to the customers' needs and try to design and develop manufacturing equipment based on that. One of these pieces of equipment is a customized test handler. We are also producing various equipment including full auto tester for camera modules, laser solder mounting equipment and laser welding equipment. We are using the SAIGON STEC plant for overseas market distribution. These pieces of equipment were originally used in our own production sites, however we thought that we could apply the know-how to customers and we started offering the equipment to our clients overseas.

We also offer environmental products and services for energy saving, storage, and generation. We are pushing for SDGs (sustainable development goals) in this business. We are offering storage battery systems, solar panel cleaning agents, and the design & development of digital signage. Okayama is less prone to natural disasters such as earthquakes compared to other areas in Japan, so this is the ideal place for production.

In the last 30 years, Japan has seen the rise of regional manufacturing competitors who replicated the Japanese monozukuri process at a cheaper labor cost, pushing Japan out of mass industrial markets. However, we still see many Japanese firms as leaders when it comes to niche B2B fields. How has Japan maintained its leadership despite the stiff price competition?

Certainly, in the last 30 years, I feel that Japan has been pushed out of the mass manufacturing industry/market due to the demand for cheaper products which led to intense cost competition. Japanese companies also sought to manufacture cheaper products and expanded their business overseas.

The reason why we were able to maintain our leadership position is that the culture of monozukuri has been deeply rooted in the Japanese manufacturing process. The pursuit of the highest quality and creating high added value has become the mentality. I believe that Japanese monozukuri culture is globally accepted and indispensable for the future.


Japan is the oldest society in the world and has a rapidly shrinking population, presenting two major challenges for Japanese firms. The first is the labor crisis and the second is the shrinking domestic market. What are some of the challenges and opportunities this demographic shift is presenting to S-Takaya?

This change in demographics is also decreasing the working population, while there is also a decrease in the minimum wage. All these factors are weakening the purchasing power of Japan and eventually, it will lead to the shrinking of the domestic market. If we turn our attention to the overseas market, the opposite is happening. Populations are increasing, especially the working population, with many nations strengthening their purchasing power. We are looking at countries that have a growing young working population and purchasing power. We found Vietnam to be the most ideal place to establish our plant and penetrate the overseas market. Expanding our global market share in the semiconductor business will contribute to our domestic growth.


Final stage packaging is important to prevent damage and corrosion of semiconductor wafers, with S-Takaya producing various types of packages. Can you talk more about your semiconductor packages?

Because of our history with Sharp, we were able to communicate with many clients from different fields and tiers. This relationship allowed us to enrich our product lineup for our packages. Having been Sharp's partner company for 40 years, we advanced our technology from SOP (Small Out-Line Package) to TCP (Tape Carrier Package), COB, CCD, CSP and COF/SOF. We gradually increased our packaging techniques and products until we became an integrated company for OSAT that can offer a one-stop service. Our clients are assured that we can meet their OSAT requirements. We have also advanced our module technology through the camera module production. We used our packaging and module technologies to meet the demands of the miniaturization of semiconductors and 3D technology.


Now that you bought back your company shares from Sharp, what are your new plans with your newly established firm, S-Takaya?

With our accumulated expertise and our technologies for packages and camera modules, we are trying to look for new partners. The Japanese semiconductor sector and semiconductor-related manufacturers are shrinking. We considered what we can do with the knowledge and know-how we accumulated on semiconductors, and I believe that we can survive if we pursue our OSAT business. We would like to maintain our good relationship with Sharp, and also expand by looking for other potential partners. We believe that there will be a revival of the semiconductor business in Japan in the future, so we decided to reorganize our capital relationships. When that time comes, we would like to become one of the main companies in the semiconductor sector.


Where are you looking for partners, and what are you looking for in potential partners?

Manufacturing and development of camera modules and power devices that are our core technologies are drawing a lot of attention in the semiconductor industry. We will continue to focus on these areas and find partners we can work with. Our strength is providing OSAT service, which is the back-end process. However, without wafer suppliers, we will not be able to offer these services, so we would like to continue looking for partners in the front-end process area. We have to bring out synergies in our partnerships and share our knowledge and know-how with them to maximize the synergy effect.

We are not limiting ourselves domestically. We are open to overseas partners. Overseas companies may find us as a good production firm to supply their products to end users in Japan. One of our strengths is the sensing technology in image sensors and the advanced version of this technology is the radar module which covers all the processes, starting from development. We are able to provide a one-stop solution for the radar modules from the development to the mass production. We help design the process for production as well. This allows us to provide a high-quality production system to our clients. Our goal is to provide high-quality, low-cost services that meet the delivery time to end users. We are looking for partners that can realize these goals and create synergies with such partners. The semiconductor business is broad, both domestic and overseas, so our focus would be on the analog LSI, power device and image sensors.


Which markets have the most potential for your company that you would like to expand into in the future?

We are in the second founding period of our company development and we set up a goal called STEC vision 2030, which is a mid to long-term strategy. We set up a three-year plan in three phases. We are now in the first phase where we are identifying our focus area as well as regional areas and partners. The preferential areas where we would like to find partners are the United States, Germany, Japan, Taiwan and Korea. The analog LSI, power device and image sensors are the markets we would like to penetrate and find partners in. We are now an independent and stand-alone company. The investment (not only money but also effort and time) in our business sector is quite huge, so we need a firm narrative behind it to make the most effective investment. This (STEC Vision 2030) is our grand vision for the next few years and I am sure we will make small adjustments along the way. We are trying to establish a goal that is most suited to us so we can grow in the future. Our company philosophy is to “build a rich life”, “create an attractive workplace”, and “aim for a comfortable society”.