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Tayca Corporation Harnesses Cutting-Edge Japanese Technology to Stay at the Forefront

Interview - May 27, 2024

In an era where economic and demographic changes reshape industries, Tayca Corporation and TFT Corporation stand out through innovative resilience and technological prowess. Shunji Idei and Masahiko Tauchi, presidents of these leading entities in the piezoelectric and chemical sectors, share insights on effectively navigating these transformations.

SHUNJI IDEI & MASAHIKO TAUCHI, PRESIDENTS OF TAYCA CORPORATION AND TFT CORPORATION
SHUNJI IDEI & MASAHIKO TAUCHI | PRESIDENTS OF TAYCA CORPORATION AND TFT CORPORATION

Right now is a pivotal time for Japanese makers. Policies like the US Inflation Reduction Act are forcing corporations to diversify their supply chains for reliability and to reduce country risks with nations such as China. We know that Japan is known for its reliability and advanced technology. Lastly, due to a weak JPY, the “Made in Japan” brand has never been more cost-effective. This means that Japan has an opportunity to expand upon its existing global market shares and leadership. Do you agree with this sentiment, and what are the advantages of Japanese companies in this current macro environment?

We understand that the current situation gives us both positive and negative points. The JPY has been weaker since the Covid-19 pandemic. During that period, supply chain disruptions were also a big issue. These two factors have had a huge impact on Japanese businesses and the Japanese economy. On one hand, Japanese manufacturers that import raw materials to produce general items have struggled a lot. On the other hand, however, the companies that make products with high functionality using advanced Japanese technologies have large customer bases outside of Japan. Their international customers now have better access to these highly functional advanced products at more reasonable costs. This has presented more business opportunities for those Japanese companies. They are the two main trends. 

 

What do you believe to be the strengths of Japanese firms in the global market? What makes Japanese firms and Japanese products stand out from their regional competitors?

Japanese companies have advanced technologies beyond what the customers require. That allows them to make products that are the best fit for what the customers want. Our main strength is our technology. Though competitors, especially Chinese and South Korean manufacturers, are trying to catch up, we are making an effort to go further on technology. We must not stop thinking and will not stop thinking.

 

Japan’s technology is very advanced, as you have highlighted. However, given Japan’s demographic situation as the oldest society in the world with a rapidly shrinking population, maintaining the know-how of this technology is going to become very difficult. There is a labor crisis in Japan with a smaller pool of younger graduates coming through to replace their older workers and pass on their knowledge to the next generation. The domestic market is also shrinking at the same time. What have been some of the challenges that Japan’s demographic shift has presented to your firm, and how have you been reacting to them?

While it is a fact that the population is declining, we continue to hire people. We are also focusing on developing our existing human resources. We have extended the term of employment age at the company so that our experienced workers can continue at the company for longer. I believe that the Japanese older generation is very energetic and that they can continue to work even longer. In addition we have to be supported by the next generation. Therefore one of our missions is to be a fascinating company selected by young people in not only Japan but also other countries. That is how we and many other Japanese companies are reacting to the demographic situation. 

 

Your know-how is very handy when it comes to the very technical field you are involved in, which is of course the piezoelectric field, specifically piezoelectric ceramics. We know they offer various benefits to the users besides control and quick response times. However, there are also a series of challenges involved. They are very fragile and can be prone to cracking and breaking under certain mechanical stresses. They are also very temperature-sensitive as well with extreme temperatures affecting their performance and making them less reliable in operations. This is especially true in humid environments. As a manufacturer of piezoelectric ceramics and materials, how are you overcoming some of these challenges in your products?

Such quality matters you mentioned were quite important for us. Our products are hard inorganic materials. Additionally, our products require electrodes such as gold, nickel, and copper which are subject to corrosion. Careful attention must be paid to processing conditions, and these surfaces require special attention regarding temperature and humidity conditions. As you mentioned, our products are very delicate materials, however such physical properties make us very excited. We have applied our own ideas and know-how to the handling conditions of our products and have succeeded in overcoming the corrosion and fragility experienced. In addition, we learned our customers sometimes have the same quality challenges when processing our products. After discussing such issues with our customers, we have attempted to resolve the issue by performing processing ourselves that meets the customer's needs. Our strength is exactly in this technology that can add customers’ processing into our base products.

Each customer has their own unique design and the same two products do not exist. We propose our technology to the customers, and they select whether they want to process by themselves or want us to process for them. This has created our originality and big business opportunities for us. 

We are originally a manufacturer of chemical materials like our titanium dioxide which is a pigment used for paint or ink. Then our product is one of their raw materials and is formulated in their products. It means that we just supply the pigment powder and the customer decides how they want to use it.

Such a business style was our original business, however our piezoelectric related business is totally different from our original style. Our products are the parts, not chemicals, of customer’s equipment. We do not seek to produce end-user products such as Ultrasound imaging machines or related equipment for example. However, our purpose is to cover very close to the end product by providing our solutions. 

 

One of the solutions you provide is your piezoelectric single crystals. We know that in 2022, TFT started manufacturing single crystals in collaboration with Tayca and your US group company TRS Technologies with your product lineup including the PMN-PT and the PIN-PMN-PT. Could you give us a brief introduction to some of these products and technologies? What makes your single crystals superior to more conventional ones on the market?

Ceramics made from powder consist of polycrystalline, and each powder has an electrical direction. When the ultrasonic is generated, ceramics do not show complete single directionality of ultrasound as it is multi-crystal. To solve such directionality, Single crystal products perform effectively. Single crystals can make a single direction of ultrasound, and this single directionality of ultrasound greatly contributes to improving the resolution of the imaging system.

We call PMN-PT the 1st generation of Single crystal and PIN-PMN-PT the 2nd generation. Each crystal has each characteristic, and our customers select considering their concept of each equipment. In general, PIN-PMT-PT has high performance on clear imaging because of a high dielectric constant. In addition, recently we reached the 3rd gen, which formulates rare earth elements to the 1st and 2nd gen, which has both good characteristics of PMN-PT and PIN-PMN-PT and we just started to introduce this 3rd gen to customers. Furthermore we are in the developing process for the next 4th gen. This 3rd gen is our strength and feature as of now. We expect to contribute to the big improvement of Life Science-related technology. 

 

TFT Corporation acts as the sales department of piezoelectric products provided by Tayca Corporation. It is only fair to introduce our readers to Tayca Corporation which is the mother company of all these businesses. We know that Tayca Corporation was founded in 1919 and has grown into a leading manufacturer of industrial chemical products including as you mentioned titanium dioxide, surfactants, etc. Could you please give us an overview of your company Tayca Corporation, the different types of fields that you provide your solutions to, and what fields you would like to cater to in the future?

As you mentioned, in 1919 we TAYCA started as a manufacturer of fertilizers and aluminium fluorides at first and changed to a manufacturer of Titanium Dioxide Pigment and Surfactants. In the 1980s, we accelerated R&D activities in the life science fields like Cosmetics and Piezoelectricity, and tried to introduce new products globally. Fortunately our R&D items for the two fields succeeded to have reliability from many multinational customers as an advanced and high functional material. Especially our micronized TiO2 and ZnO became one of the must-have components for sunscreen cosmetics. 

Life science is one of our business pillars, and the other pillar for the future is the environment and energy fields. Our recent developments in this field are several Conductive Polymers consumed by Electric Capacitor-related manufacturers. We believe this Polymer material can contribute to EV development. 

In the same stance as our piezoelectric business, our role in the market is to continue to provide novel and functional materials for future development for these two fields as a chemical expert.



Do these sunscreen samples come from titanium dioxide?

Of course yes, it comes from our micronized titanium dioxide and zinc oxide. The characteristics of our products for cosmetic use are precisely controlled powder particles and the surface treatment on particles. Customer requests vary widely depending on their product concept, such as UV cut ability, colour tone, and dispersion stability etc., so we strive to meet these requests through a combination of particle control and surface treatment technology. 

To date, luckily we received two awards from the Ministry of Economy (METI) as the Global Niche Top 100 Company. The first award we won is for this micronized titanium dioxide and zinc oxide, while the second award is for our piezoelectric items.

 

Under the Tayca Group, there is the TFT Corporation, as well as TRS Technologies, which is based in the US. What are some of the synergies you can generate amongst the group companies, and are you also looking to expand the group going forward? 

Before explaining about the synergy between TAYCA-TFT and TRS Technologies, I would like to give a little more detail from our history on the development of piezoelectricity. 

In 1985 we started R&D for the Life Science field. At the beginning, our target was to just develop raw materials for this field, but we decided to change our concept from raw materials to focusing on processing items with more function. Our R&D team had struggled with this challenge, however, finally we could achieve our unique technology like current ceramics. To accelerate the Piezo-related business globally, TFT was established in 1997. 

TFT’s ceramics business, especially Ultrasound imaging equipment, was successfully growing with much support from our customers, but TFT recognized that some of customers’ requirements were being slightly changed to single crystal instead of ceramics.

Based on this recognition, TFT started development of Single-crystal technology for many years. At the same time, TRS Technologies, which is located in Pennsylvania US, looked for a business partner, so we contacted them and finally decided to take over in 2018. After taking over, we completed setting up a new facility for single crystal in Osaka Japan as well. Those are perfectly based on TRS’s technology, and our synergy has been started at this time.

Regarding synergy, we have three points of view on sales & marketing, development of novel crystal, and improvement of production. 

Right now we are able to provide products from two sites in the USA and Japan. It is very convenient and effective for customers to realise better purchasing with a minimised price considering fluctuations of exchange rate and tariff matters. 

Development of new crystals also has been accelerated in both sites. As we mentioned above, we are challenging ourselves to develop the 3rd and 4th gen crystal, and these will be popular in the near future, we believe.

Also on production improvement, both sites will collaborate and cooperate much further. Right now we have succeeded to produce no crack wafer of single crystal. Our crystal consists of more than three elements of each physical property, so crystal orientation is very sensitive. Before taking over, at the beginning of collaboration, some cracks existed on our crystal wafer, but now it has totally improved. As a result, we can cut off more goods from 1 crystal and this improvement is much more effective for our productivity and cost minimization. We will contribute to our customers by proposing better quality and price with stable supply.

Earlier, you talked about the labour shortages issue, which has to be improved very soon. Also from this point of view, collaboration on both sites is very important. Actually we are just in the process of innovation through the implementation of Robotics, AI, and Automation based on collaboration. In addition we already have two chemical factories in Thailand and Vietnam. These two resources will become another potential way to resolve our future issues as well.

 

Speaking about the acceleration of innovation, not only does it apply to introducing automation and robotics, but it also means accelerating innovation when it comes to an R&D perspective. You spoke about how TFT was founded to supplement and take advantage of the R&D resources of Tayca. Since then, you have grown to become a piezoelectric specialist and we know that you took over TRS Technologies in 2018. This has seen immense synergies, especially in the US. Going forward, from an R&D perspective, are you looking to partner up with companies outside of the Tayca group to enhance your R&D capabilities or are you looking to find more distributors to enhance your international sales network as well?

That is truly an important matter for all the TAYCA Group. We want to expand our market share and the applications of our products. Right now, what we are doing may not be enough. 

The first option that we are considering is to take advantage of a trading company that has branches outside of Japan. That is a method that is often used by Japanese companies. The other idea that we are exploring is collaborating with our competitors in some cases or a manufacturing company that uses the same processing technologies as we do. When it comes to collaborations for manufacturing and monozukuri, I think that is a must.

The Chinese market is very difficult as they have their own unique culture. We are currently exploring the best approach to take for the Chinese market. This includes distribution and marketing.  

 

On top of the US and China, which other markets do you see growth potential for both Tayca Corporation and TFT Corporation?

The ASEAN region, India and Africa are important areas where we see potential for growth in the future, which will depend on the population basically.

You mentioned earlier that the increase of the aging population in Japan is negative especially when it comes to labor. However, it might be very positive in terms of demand as more and more people will require medical treatment. Medical equipment is also becoming more and more advanced not only in Japan but also around the world. As a materials manufacturer, we must determine how big our presence should be in the world market, as there are definitely customers in India, Africa, and the Middle East. 

For cosmetics items, our understanding is that there is still big demand from Japan, Western countries, and Asian countries including China. 

 

Tayca Corporation was established in 1919 and is this year celebrating its 105th anniversary. Imagine that we come back five years from now for your 110th anniversary and have this interview all over again. What would you like to tell us? What are the dreams and goals that you would like to achieve in the next five years?

Before celebrating our 110th anniversary, we have our MOVING-10 long-term plan. We will finish the first stage of this plan this fiscal year. The next fiscal year will be the start of the second stage of the plan. Our business portfolio includes some general-purpose items that can be easily affected by changes in the external environment. The demand for these items could fluctuate a lot. On the other hand, we also have highly functional products such as our piezoelectric products and cosmetics materials which have been making steady progress. In the next ten years, we TAYCA will switch our commodity-related business to the functional specialty-related business while expanding our strengths, which lie in our high-performance products. I believe that it will be the right way to survive and grow while making benefits for our stakeholders. That is our strategy and structure that I want to realize. 

I want to contribute to the structure that the president wants to achieve. I am responsible for the piezoelectric products. Already a lot of resources have been given to TFT like TRS Technologies and they have started production at our Japanese factory. However, we have not yet been able to take full advantage of these resources. Therefore, my minimum goal is to double the sales of our piezoelectric products. That is my mission moving forward. When the sales can be doubled, we will consider investing in new fields. In five years, I hope to talk with you about what we will focus on next.

 

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