Established in 1956, Toho Kasei is a leading provider of engineered plastic products and wafer cleaning equipment. Consisting of two divisions – engineering plastics and wet processes equipment – the company serves world-leading Japanese semiconductor equipment and electrical device manufacturing companies.
As an expert in engineered plastic products and the manufacture and sale of semiconductor cleaning equipment, could you give us your take on the advantages of Japanese manufacturing and why you think it has been so successful when it comes to high-mix-low-volume?
We believe that the strength of Japanese manufacturing lies in its attitude of responding to customer needs with its differentiated and strong technology. Because we are trying to meet the diverse needs of our customers with a wide variety of technologies, we believe that high-mix-low-volume production is inevitably necessary.
As you say, one of our strengths is that we have two different divisions, the Engineering Plastics Division and the Wet Processes Equipment division. Our customers include world-leading Japanese semiconductor equipment manufacturing companies for the Engineering Plastics Division and many domestic electrical device manufacturing companies for the Wet Processes Equipment division. Those companies have been able to maintain their competitiveness in the international market even today. These companies give credit to the companies that accept their requests for improvements, and I think that our company has been able to meet their expectations because we can respond in terms of both materials and equipment. Obviously, we are not a very big company, however, we are very flexible and happy to accept small changes that are requested by our customers. Thus, these companies highly regard our flexibility, quick improvement proposals and development speed.
Our parent company is Daikin, so we can even discuss raw materials. I personally was an employee of Daikin about 10 years ago, but when compared, our company has different strengths for the Wet Processes Equipment division. We assist our customers that produce semiconductor and microelectromechanical systems (MEMS). These companies that produce these devices are competitive in the international markets and all use different types of manufacturing, so their cleaning methods need to be tailored in each case. They are not really focusing on the cleaning equipment for various devices such as sensors, MEMS, power devices, etc., and we have the flexibility to accept their requirements. We are working with companies that have great established semiconductor technology and also competitiveness in the international markets.
What position does TOHO KASEI play in the semiconductor production value chain?
First, the materials or resins need to be cleaned appropriately for semiconductor applications. We use Daikin materials in our Engineering Plastics Division. Daikin produces great quality materials meaning we have reliable materials. This is where the customer gives us credit, and in many cases, the customers ask us where we get the materials from. Customers know that the materials come from Daikin and are of the highest quality and reliability. When you think about how to mold resin, we use oil press and dry press processes which are not clean at all, so it is very important for us to identify where needs to be cleaned.
The manufacturing cost and the management cost of a clean room is quite high, so obviously if you make everything clean the cost will be high. Therefore, we need to identify where the vital points that need to be cleaned are.
In the Wet Process Equipment Division, in order to maximize the effective use of the extremely expensive semiconductor manufacturing clean room space, we are making equipment that focuses on productivity per space. With the goal of doubling the space productivity compared to conventional machines, and a custom-made but standardized production system, the equipment manufacturing lead time can be shortened by 60%, and the chemical usage fee and exhaust volume can be reduced by more than 30%. We are working to solve problems in the current semiconductor manufacturing value chain.
In particular, cleaning equipment in Japan is aging extremely rapidly, and it is necessary to replace it as soon as possible due to instances such as fire accidents. However, the equipment was large, and there was a big problem that the equipment could not be replaced without stopping production. In contrast, with our new equipment concept, S-FORM, we have come up with the idea of making it possible to renovate the entire wet equipment area simply by finding a space of only about 4mx2m in the clean room, and device manufacturers have taken an interest in it. We hope that it will help to make a big change, including the environment for SDGs and carbon neutrality.
Semiconductor development is dictated by Moore’s Law, which means that the number of transistors on an integrated circuit doubles every two years. Ten years ago, 7nm was the minimum size, but only a couple of months ago IBM released a 2nm wafer. Development and progress are super-fast in this industry. How do you keep up with the trends of the industry? What different configurations and sizes do you provide for your customers?
My understanding is that there is a relationship between the level of contamination or chemical purity and the yield of the devices. We’ve been meeting the requirements of our customers, but my understanding is that we try to make things as clean as possible using the current technology that is available. Reducing contaminations is not simply a quality issue, but also performance.
When it comes to nanotechnology, we need to think about the number of atoms it means different from the current contamination. If it comes to resins, the short chain of oligomers could affect production. To deal with this challenge we must work closely with the material manufacturers.
Every day, we encounter various issues, needs, and points for improvement from our customers and manufacturing equipment manufacturers. By picking up, investigating, analyzing, and responding to these issues, we believe that improving the performance of a single plastic part leads to improving the performance of manufacturing equipment, which in turn affects the device quality and performance of device manufacturers. I know we would like to contribute to this industry by devoting our full efforts to solving these problems.
Are you looking for partnerships, especially overseas partnerships in Europe or America that could help you to create new materials?
If you think about a company like Intel, they have cutting-edge technology, so in order to solve their problems, they need to go back to check the materials. They are actually contacting resin manufacturers like Daikin, and then in turn, if Daikin needs to work on some molding processes, they will contact us.
There was another trend in addition to making things thinner, and those companies tried to make higher levels of memory to make the semiconductors 3D, and in order to make that happen the semiconductor manufacturing device makers were asking us to improve the properties of our materials. We are trying to help them solve these issues.
In the Wet Process Equipment Division, from now on, we will turn our eyes from the Japanese, Chinese, and Southeast Asian markets to Europe and the United States. We are looking for opportunities to collaborate with overseas partners that can help us aggressively expand into Europe’s power semiconductor sector and contribute to efforts toward domestic production of state-of-the-art devices in the United States.
During COVID we have had a huge shortage of chips, and one of the things that emerged was an over-reliance on Taiwan as a production hub. As such we’ve seen in America a reaction to this with the Chips Act passing and $52 billion in incentives being made available to increase domestic production. As a manufacturer of equipment for semiconductors and a tier 2 supplier, what opportunities or business chances do you see from these regional pushes in American and European production?
Semiconductor manufacturers are super busy. We are trying to catch up with them, and if I’m honest we are super busy too because of our lack of capacity and the shortage of the raw materials. These semiconductor device manufacturers are pushing us very hard to produce more. Honestly, for the Wet Process Equipment Division, Japan has great companies for different types of semiconductors such as power devices and compound semiconductors. They have world-class capability technology, so we are going to support them.
If we could talk now about your engineering plastics and you have been providing a very wide variety of products since 1956. One variant that caught our attention was your laminate which you have the number one market share for and which utilizes an interesting Electret technology. Could you tell us a little bit more about this material and why you have the number one market share?
Yes, it is used in a lot of electric condenser microphones (ECM). These ECMs use our materials and we have the number one share in the market as you have mentioned. In fact, do you remember the generation of phones before smartphones, those particular phones used ECMs. In smartphones, the devices are soldered to the chip and therefore use different microphones which are called MEMs microphones.
Obviously to create these products research and development are critical, and in order to foster innovation, you need to invest in R&D. What are some of the projects you’ve currently tasked your R&D department to work on?
I understand that R&D should be a number one priority, but I am finding it difficult to answer your question. I think first we need to identify the needs of the semiconductor device manufacturers. If those companies complain that our products are not as good as our competitor's, we need to go back to the drawing board and develop products that can beat our competition.
With that process, we will be happy if we can find our strength in the product or production processes that can be registered under a patent. Having the patent means that we have come up with excellent technology or techniques that we can cherish and take advantage of in other lineups of products we have.
Our divisions are small, but we are doing a lot of different things and we cover a very large range of products (molding, coating, laminating and equipment). There might be a situation where our products reach a similar level to our competitors, however with our fluoroplastics products, we are able to combine different techniques and provide customers with added-value products.
R&D is a funny endeavor, and if you start some research, theoretically you could continue that endlessly, however, that doesn’t always lead to the creation of better products. As a researcher, you might strike it lucky and develop a product that customers really appreciate, however, if that research doesn’t go so well, things go back to the starting point of product development. The R&D strategy really depends on the request, and the customers or market making the request, and at TOHO KASEI, we will adjust accordingly. One way is obviously to try and reach the goal as fast as possible, and the other route is to go as deep as we can with the research. They are different approaches, and for specific techniques to be developed, the sense or feelings of the engineers' responsible matter. Balance is quite important, and that is where paying attention and determining how far to go makes the difference.
All I can do is to support the technology in development and keep the engineers on the right track. The idea of controlling or steering an engineer in a particular direction is not easy to do. They will make the breakthrough only when they are deeply interested. Those engineers know the tools, techniques, and market better than I do. Engineers are highly motivated when they are sure that the theme they are working on is heading in the right direction. All I can do is support them in those endeavors. For example, knowing the customer's evaluation is important for their motivation, and what I can do is to create opportunities for them to directly hear the customer's voice.
You mentioned the two new semiconductor materials for the next generation of power semiconductors: silicon carbide and gallium nitride. These are revolutionary new materials that can handle high frequency currents and at the same time reduce heat – a big problem for traditional silicon-based semiconductors. On the other hand, these new materials are very delicate and sensitive making them difficult to handle with existing machinery. How are you reacting to this next generation of semiconductor materials?
From the engineering perspective, we use traditional techniques for silicon wafers so actually, we don’t need to think about the challenges you mentioned because we simply support the semiconductor device manufacturers who are working for the big companies. For the wet processes division, however, they need to work on these new materials, and obviously, we need to meet the customer's requirements. We must continue to listen to them and meet their requirements.
The new materials have different weights, densities, thicknesses, and colors. As a result, the demand for transfer technology and wafer discrimination technology will increase significantly. A prerequisite for the process is that the equipment is transported correctly and safely and can be verified. Doing this quickly and accurately is important for the stability and reliability of the equipment. We have taken on the task of these challenges, established a very compact and speedy transfer technology, and already have a discrimination technology that confirms the certainty. By combining it with the latest compact equipment that I mentioned earlier, we are enhancing our ability to handle these new materials. In addition, in the cleaning process, we are expanding the scope of our response from the wafer manufacturing process to the device manufacturing pre-process and post-process.
We have this laboratory demonstration room, and here we can try different cleaning methods with different temperatures and chemicals. Sometimes customers can come and visit us in order to run their own experiments. Using this demo room, we can determine the right process and then that process will be incorporated into the equipment.
In the past, we had a long-run running relationship with Japanese customers, and through that relationship, they would suggest ideas, we would write up a proposal for their approval, and discussions were done in this manner. Obviously, the equipment that is delivered to each company is different, so what we do is group these processes into units so that we can cover different types of customer requirements by using these units. In each unit, the module is standardized so that they are available for international customers in the future.
You’ve spoken extensively about your Japanese customer base, and how you have developed this modularization strategy to cater to each unique demand. How are you adapting this business model for your international customer base?
As I mentioned earlier, as an initiative to strengthen the semiconductor supply chain, we will actively expand demand for replacement of aging equipment in Japan, establish a standardization of new equipment start-up and after-sales follow-up work. We will continue to leverage these technologies to the benefit of our international customers. I think we are almost ready to implement this strategy in China and Southeast Asia.
What we are trying to do is establish our technology for the domestic market first and then we will take advantage of these techniques for the benefit of our international customers. I think we are almost ready to go with this strategy.
We have clearly differentiated ourselves from our competitors, so we have some great products that demonstrate our strengths to international customers. We have established more and more partners to help us to connect with international customers.
Our perfluoro elastomer "DUPRA" is a sealing material used in semiconductor equipment and is an essential component for equipment maintenance. Major domestic equipment manufacturers also sell equipment to overseas customers. Most of the overseas customers who have purchased the product want to purchase the same seal material for maintenance. When that happens, it will be a great business opportunity for us as well as a great opportunity for customers to better understand DUPRA's strengths.
By recognizing DUPRA's strengths, there are an increasing number of cases where we are considering improvements in sealing materials used in other equipment. Accurately grasping the customer's requests for the project, quickly developing, and making proposals, and implementing improvement activities to solve the customer's problems lead to business. We believe that focusing on improvement activities will lead to a big leap for DUPRA in the future. On the supply side, in order to respond to customer requests, we will not only strengthen our domestic operations, but also actively add bases globally.
Your company is celebrating 66 years this year, so I would like you to imagine that we come back in four years' time for your company’s 70th anniversary and have this interview all over again. What are your dreams for this company and what goals will you like to have achieved by then?
We are one of the foremost companies in the business of polymer molding, however, there are some bigger companies out there that do similar business to us. Also, when you think about our wet processes and cleaning equipment, we are a way smaller company. Traditionally our company is not big enough to be known well. However, despite this, we want to get our name out there and create some form of brand recognition. We want customers to think of the value we bring when they think of TOHO KASEI. Our company prides itself on supporting those big companies in their semiconductor device manufacturing, and we still want to be associated as a key problem solver when it comes to the semiconductor sector. We ultimately want to establish a good reputation and a good name when it comes to this niche market.
On the other hand, we have focused on the semiconductor business in this interview, but in the future we believe that we need to develop non-semiconductor businesses. We are looking forward to the next 3-4 years and are very excited about our future expansion.