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The Japanese electronics industry continues to struggle through hard times.

All of the major electronics companies in Japan face financial difficulties, and both Sanyo and Sharp shut their own businesses and disappeared from the Japanese market. The two remaining powerhouses, Panasonic and Sony, made tough decisions over the years and closed or consolidated several major divisions and businesses as they fight for their survival.

Toshiba could be the next major electronics company to announce significant changes as they face multibillion dollar charges for US nuclear project costs. News reports over the last few months quote business analysts saying that Toshiba may not survive without financial help. They expect Toshiba’s balance sheet will be ugly, and its shares are tanking. My business relationship with Toshiba spans over 35 years, and I love their technology policy and engineering staff. I am concerned if they can survive in this competitive electronics industry.

Tanaka Seizo-sho (Tanaka Engineering Works), was founded in 1875 in Ginza, Tokyo as Japan’s first telecommunication equipment supplier. Toshiba was formed after a few mergers and acquisitions, and grew continuously over the next 140 years, remaining the technological leader in the industry. Toshiba group now has over one hundred eighty thousand employees with fifty billion dollars in revenue, and manufacturers everything from consumer electronic products to nuclear power generators and missiles. Their engineering department remains the cutting edge leader in many categories that include semiconductors, telecommunication equipment, electric generators, medical equipment and more. Even though Toshiba was not the first develop certain products, their engineers improved on them in a short time. Mobile products and home appliances are a couple of examples. Toshiba was once one of the top five suppliers for notebook computers in the North American market.

Some could argue that Toshiba’s success sprung from their engineering leadership. They were the leaders in the industrial and commercial markets with power generators and medical equipment, but they fell short in the consumer market. Toshiba did not have a strong market share with flat panel TVs or smart phones. You could blame this on their leadership team and its lack of flexibility and bureaucracy. Their financial problems probably started with the IT recession in 2001. Toshiba was losing its market position in many areas, so they decided to expand the nuclear power business, and acquired Westinghouse in the US. Unfortunately, it was a big mistake. One of its subsidiaries had a huge debt of more than $7 billion. This forced Toshiba to sell their profitable medical business to Canon. This was still not enough, and now they are considering selling their semiconductor business.

Toshiba built their empire over the past 140 years. Unfortunately, one wrong business decision could crumble the empire. Many capable employees including well-qualified engineers will lose their jobs. Most of my business associates at Toshiba have left the company. This falls squarely on the shoulders of the executive team at Toshiba.

DKN Research Newsletter #1706, March 5th, 2017 (English Edition)(Micro Electronics & Packaging)

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Headlines of the Week

1. ZMP rolled out an ultra compact platform “RoboCar MV2 2017” for the R&D of EV cars.

2. Kyoto University mathematically studied the nanowire formation process of graphene nano-ribbons. It will be valuable to analyze the mechanisms of nano-electronics.

3. Bando Chemical commercialized a new flame-retardant conveyer belt “FR7500”. It is heat resistant up to 100C.

4. Murata commercialized the world first 0201M size ceramic chip capacitor with 100 pF for cellular phones and other mobile devices. Size: 0.25 x 0.125mm.

5. Tohoku University developed a new silicon base anode material for the high performance lithium ion batteries utilizing waste silicon wafers.

6. Canon commercialized the industry first replica mask producer for the nano-in-print manufacturing process down to 10 nanometers range of the semiconductors.

7. RIKEN developed a new deep UV light LED device with a high power efficiency as the alternative light source of mercury lamp.

8. Mitsubishi Electric agreed with Cognex K.K., a leading supplier of vision sensors and code readers, to long-term business cooperation in the FA sensor market.

9. Sumitomo Electric rolled out a small size, but high efficiency power storage system POWER DEPO III with lithium ion batteries for home use.

10. Nichicon codeveloped a new SiC base power conversion module for the power sources of the accelerators at high frequencies with Osaka University and Riken.

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