Tokyo Diamond Tools Mfg. Co., LTD. was found in 1932. Since then, with its reliability of technologies and advanced research and development, the company has managed to diversify its business activity into diamond tools and CBN Tools. We had a talk with the president of Tokyo Diamond Tools Mfg. Co., LTD., Yosuke Hamada, to talk about the relating markets of Japanese SMEs and the development of technologies of his company in following the global trends.
Other Asian countries starting to produce similar products cheaper in price compared to Japanese reliable and quality goods. What should Japanese manufacturing companies need to do to be able to compete in the market?
In my point of view, Japan should not compete with these countries in terms of price, and continue to be competitive in terms of functionality. Giving the example in the watches market, when we compare the Swiss watches with Japanese watches, Japanese watches are for a wider range of the market with high-quality materials at a cheaper price. We believe that moving forward, we should aim to become like Swiss watch manufacturers, where it has an expensive price with high-quality products.
If we look at the tools in this industry worldwide, in terms of the products, China, Korea, and Taiwan have caught up to the level of Japan. To compete with these countries, Japan needs to pursue much higher quality and those companies who are able to do so will excel in the industry.
What should SMEs do and what are the challenges they need to face to get into the international market?
First of all, these SMEs are not really known at the international level when compared to Japanese big companies. They need to make sure they are appealing through having a solid public relation to different markets around the world. SMEs should not only create their opportunities to promote their names widely, but also provide valuable contents.
When we talk about high precision machines, there are also software developments playing a role. What do you think are the roles of engineers in operating the complicated automated system in your company?
In my point of view in answering the question, I would like to see engineers have the spirit to keep on learning and seeking new challenges with a proactive mindset. It would be important for the accumulation of data in playing a role in the process.
Our company has 89 years history, however, even if we have a long history and experience, if it couldn't be accumulated as information, that history itself won't be valuable. The role of the engineer is how to connect the data accumulated over many years to higher quality products.
Utilizing AI and deep learning on data accumulation can polish and strengthen our quality controls. Through these, we can accumulate data on materials to use and its processing styles. Each time we process a number of materials, it creates a sort of data to be utilized in the future. This accumulation of those sorts of data into a database is applicable to enhance the design and development of quality control and that is the key to opening the gate to a higher level of technical expertise that gives us an edge over our competitors. We are already able to confirm how deep learning enhances technological expertise, so we are going to continue to do the process to move forward.
Could you give us an illustration as an example of how deep learning helps you to develop your technology in the past?
We cannot really explain it in detail how deep learning works, as it is a competitive advantage. However, we can share to the extent of the example of how we deal with diamonds. Diamonds have properties in being volatile and it is not always stable, especially since we are sourcing, buying, and processing it. It is important how to identify the changes in the properties of the diamond. We have the process to detail analyze the way of properties change in the materials, and it is useful for quality control and technological development.
Your company has specific products targeting hybrid vehicles as next-generation vehicles, can you explain what are the products you have in response to following this trend in the automotive field?
30-40% of our business focuses on the automotive sector. As the trends shift forward into electrical vehicles, there are great opportunities for our company in the future. What I realize is that a car is slowly changing from being a machine into an electronic device. Electric cars will be filled with just a lot of sensors and cameras with the autonomous driving system. Because our product lineup is mostly dealing with electrical components, the trends in the automotive industry are already closer to our market we have been catering to.
As a whole, the number of components will decrease in the sector with the rise of electrification. However, with EV trends, there will be new components introduced in the market we are playing.
In addition, the trend towards lightweight materials gives us an insight into what materials will be in use. 5 years ago, we sort of already know that carbon fiber reinforced plastics (CFRP) material are going to be a trend in the future. We have already envisioned the rising demand for CFRP and so we have already developed such technology to develop CFRP. CFRP will be used in both body and interior of a car.
What technology are you using in following the demand trend of lightweight materials?
Taking CFRP as an example of lightweight materials, we are providing the tool called, DTFC (Diamond Tool for Fiber Composite material) for fiber composite materials, like CFRP.
The usual tool can only process CFRP with rough edges surface, but by DTFC, a smooth end face can be made onto the fiber by cutting.
The high level designing of CFRP will be required for many fields, such as automobiles and home appliances in the future.
And DTFC will be the ideal tool for this kind of processing.
Currently, we are the only supplier this high level milling processing tool.
We see that you are able to do high-quality beveling for silicone substrate, can you tell us about it and what do you think will be the high-in-demand substrate in the following years?
We have been in silicon beveling technology for over 20 years. And with global digitization, the machining of silicone substrate will continue to grow at an annual rate of 8% at least, and we expect to double in 10 years.
In addition, With the rise of EV components, silicon carbide is now in high demand in the market, and the technology that is able to process it is very expensive at the moment. If you are somehow able to create the tools to produce silicon carbide at a more commodity price, it is a sector you can expand further for growth. We are currently putting efforts into making this affordable through our focus on enhancing the technology to that level.
In the future of 5G smartphones and further into 6G smartphones, gallium nitrate will be the substrate that will be high in demand. This substrate is something that is very hard to process. We are currently in the research stage of how to accelerate the processing time of gallium nitrate through our research and development facilities. We are hoping that we are able to find what kind of materials and technologies are able to act as a catalyst in processing the gallium nitrate.
How is miniaturization affecting the business and what are the specific technologies your company is developing in this Nanofabrication process?
What we are working on is to complete MONO/Single crystal diamond tool, which is finished with sub-nanometer precision.
Eliminating the unevenness of sub-nanometers has already become an issue. We are the one of the few companies in the world to have the ability to answer that challenge.
Despite using a very small lens like a smartphone camera, the pixels are over 100 million.
Nanofabrication processing is indispensable to make the best use of such a precise image element.
We developed the tools to process this thin lens in the Nanoscale for over 10 years and the utilization of it is something that is applicable today. The ultimate degree of accuracy in the Nanoscale in atom level measurement is very important and what we are continuing to improve day by day through our technology. We are playing a huge role to represent Japan in these high-accuracy processing tools and that is what Japan is known for. Such pursuit will open new potential markets, and with the Japanese spirit, we will be able to lead in the market.
What is the role of international market within your company and what are your international strategies in pushing into the global market?
In terms of international business, our international operations cover up to 20% of the sales. It is obvious that due to the shrinking Japanese economy, Japanese companies need to set up a strategy to expand globally to grow. In the near future, we are looking forward to increasing the coverage of international operations into half of our sales, especially in the Asian market.
Despite the weakness of Japanese SMEs at the international level, we are trying to gain market share in the Asian market and hope to further expand into the European and American market. In order to do so, we need to identify the hurdles that we will face and came up with solutions. To have a concrete sense of expanding our business into the European and American markets, we should first understand the ground reality for us as a company. Through expanding our network to the companies in these markets, we are able to understand where our weak points are, and strengths lie to actually use it to grow in reality. I do also believe that expanding through networking is not only beneficial in terms of capital but also creating alliances in different business arrangements.
You became the president in 2018, in the long-term when you step down from the presidency, what legacy and objectives do you want for your successor?
It will be an honor to create a company that is known all over the world. If you are looking for the ultimate level of processing, Tokyo Diamond is a company you should look for. As a company that also highlights the importance of sustainability of the surrounding environment, it makes me happier in leaving the legacy and objectives to the successor.