Tokyo Electron (TEL) boasts a wide range of high-performing equipment for the production of the latest semiconductors and flat panel displays, which continues to evolve in line with customers and industry needs. We sit down with Representative Director, President & CEO, Toshiki Kawai, to learn more about the company’s products and its aims to become the ‘Only 1 and No.1’ company offering the ‘Best Products and Best Technical Service’. Mr. Kawai also gives his insight into the evolution of the semiconductor industry and how TEL is responding to the latest demands in this era defined by the latest Industry 4.0 technologies, such as 5G/6G broadband, Big Data, IoT, cloud computing, advanced robotics and automation.
In the past 25 years, we’ve seen the rise of cheaper semiconductor producers such as China, South Korea, or Taiwan who by replicating the Japanese monozukuri process can surpass Japan. Why and how did Japan lose its position as the semiconductor producer?
Since the introduction of semiconductors, new technologies such as IoT, 5G, and AI have been drastically changing the production process. In fact, the main reason why Japan lost its share in the market is probably affected by the fact that it stopped investing in the short term to secure profits. Maybe the investment was inadequate because it responded too much to economic trends. The semiconductor industry is undergoing rapid technological innovation and the market is changing rapidly. In other words, it is necessary to continue investing from a medium- to long-term perspective. We need to continue to have world-leading technological innovation, and R&D investment should not be stopped. Additionally, the semiconductor industry is extremely demanding, as cost-efficiency, and productivity are key to remain competitive in the market.
What is the impact of the arrival of the big data era on the semiconductor industry?
The semiconductor industry is constantly changing, in fact with each decade there is a new technological era such as the PC-centric era, mobile-centric era, and data-centric era. More precisely, we are currently in the age of data, in which semiconductors are the core of any technological advancement. Change is our day-to-day business.
Each “new-age” means new technologies, and therefore, more investment in R&D to keep ahead of the curve. In fact, we pride ourselves for being one of the only companies in the world, despite the difficulties, to always ensure the best quality, and the most advanced technologies: “Best Product, Best Technological Service”.
Tokyo Electron's Advantage is that it is the only company in the world that has four consecutive key process devices in the patterning process, and its segment share is No. 1 or No. 2. Particularly for coaters / developers, it boasts a market share of about 90%, and for EUV, it has a 100% share in mass production. In other words, cutting-edge devices cannot be made without Tokyo Electron. Looking ahead to future growth, we will invest 400 billion yen in development over the three years from FY20.
In Tokyo Electron, we strive to become the sole provider for our semiconductor-producing clients, and in order to do so, it is important for Tokyo Electron to continue to have world-leading technological innovation.
How important are co-creation and joint development for Tokyo Electron?
As we do not produce the semiconductor itself, it is extremely important for us to collaborate with companies to create the final product. In fact, our corporate philosophy is: “We strive to contribute to the development of a dream-inspiring society through our leading-edge technologies and reliable service and support.” We support co-creation and joint development as it promotes the creation of a dream society through our leading-edge tech and reliable service and support. Without partnering and collaborating, our dreams are impossible to realize.
What has been the impact of miniaturization on your company?
The driving force of TEL: (1) Experience and technical capabilities cultivated as a leading company for many years; (2) Absolute trust from customers based on achievements; (3) Challenging spirit of employees who can flexibly respond to changes in the environment. I think we have the opportunity to show our value. TEL has a wide range of equipment and has more opportunities to add value: plasma technology, temperature, pressure control, chemicals, etc. Sharing technology roadmaps across multiple generations with cutting-edge customers for high-hit-rate development, will continue to be important to build an evaluation system with customers and provide solutions to customers.
We will continue to launch products in areas where continuous technological innovation and market expansion are expected. We are hoping to always be the pioneers of cutting-edge technology, enabling revolutionary products. Our vision is to be the ‘Only 1 and No. 1’. In addition, we aim to continue to develop the three market trends of minituarization, customization, and adapting to larger, hyper mass-scale volumes.
Which markets show the greatest growth potential for Tokyo Electron?
We will aim to be ‘Only 1 and No. 1’ by focusing on areas where our technology is predominantly utilized, areas where continuous technological innovation can be expected, and areas where market expansion is expected. We have a product line-up for four key processes for patterning of deposition, coater/developer, etch, and cleaning necessary for patterning miniaturization, which we believe is our strength. Overall, we wish to maintain our strategy based on our competitive advantages, focusing on keeping the leading position in the market.
How do you plan to take advantage of the growth set to hit the semiconductor industry?
According to research company, in the next 10 years, our industry is expected to double, almost as if the existing market will duplicate and create another market of the same size. Therefore, in order lead the industry growth while remaining market leaders, our company will continue to develop cutting-edge technologies, utilizing our long expertise, and ensuring the “Best Products and Best Technical Service” with the best partners. Providing leading-edge technology products and the best technical services to pursue continued profit, increase corporate value and bring happiness to our shareholders, customers, employees and their families, and everyone else related to Tokyo Electron.
How has monozukuri enabled you to be the company you are today?
Monozukuri is all about high-quality products built thoroughly and with precision. At Tokyo Electron, we are striving to adapt to the needs of our clients and their changing environments. We want to see the changes ahead of us and find engineering solutions before our partners ask for them, while always ensuring the highest-quality production line.
Monozukuri requires many different steps, and communication is key in order to be able to respond clearly and effectively to each client’s unique needs. It is important to accurately grasp the customer's requirements and the customer's equipment usage environment and set the target specifications. Thorough concurrent engineering, that is, from the initial stage of product development, design, process control, manufacturing, quality control; it is important to be able to do this and avoid miscommunication between processes. Therefore, TEL develops and manufactures at the same base.
If we return in two years, what would you like to tell us, what are your dreams for the company and what would you like to have accomplished by then?
As CEO, my responsibility is to assure our midterm plan is on track. The current 2024 mid-term plan aims to increase sales to 2 trillion yen. Additionally, we want to make the “Best Products with the Best Technical Service”, to be able to become the ‘Only 1 and No.1’. Lastly, through our goals we hope to make everyone happy as well, including our clients, employees, and shareholders.
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