I am fortunate to have a business relationship with Toshiba that began in the early 1980s.
I supplied flexible circuits, and my first interaction with Toshiba was designing a membrane switch for microwave ovens. Later, I was caught up in the consumer electronics boom in Japan. Many types of electronic devices were developed and commercialized, and Japanese companies were leading the global industry in technology and market share. There were about dozen large electronics companies in Japan that were competitors in the global electronics market. Toshiba was the leader in the electronics industry, and developed and marketed many types of electronic equipment and devices that included word processors, printers, VCR cameras, tape recorders, hard disc drives, transceivers, laptop computers, facsimiles, cellular phones, and more. Toshiba was also a leader in designing medical equipment. Toshiba was always one of the best electronics companies in the world.
Most of these electronic devices consumed high end flexible circuits including high density multilayer rigid-flex. I had to visit Toshiba’s plants two or three times a week to design flex circuit solutions. Toshiba’s engineers required cutting edge technologies for flex circuits that required me to develop new technologies continuously.
Toshiba challenged component suppliers to advance technologically, and rewarded us financially. We made a good living being part of the Toshiba family, and Toshiba posted record profits year over year during this time. Their engineers were capable and innovative in a very competitive consumer electronics industry. Component supplies were very confident that Toshiba’s business strategy will allow them have an income stream for a long time.
Well, nothing lasts forever and things changed with the turn of the century. Competitive pressures from Taiwan and Korea had an immediate impact on Japanese manufacturers. Market share and profits declined year over year, and companies were forced to shut their doors. Toshiba’s electronics division was strong enough to remain competitive during the recession, but their nuclear venture was weighing heavily on profits. In 2006, Toshiba acquired Westinghouse, the US power plant arm of British Nuclear Fuels for $5.4 billion. Toshiba was hit with massive cost overruns and a delay linked to Westinghouse’s nuclear projects in the US -- Westinghouse was a failed bet. Toshiba sold its profitable medical business to compensate the losses, but still required another $20 billion to avoid bankruptcy, and a potential delisting from the Tokyo Stock Exchange. Currently, Toshiba is negotiating with three potential buyers to sell their semiconductor business, and prefer the buyer to be a Japanese fund group. However, Western Digital, the major memory device manufacturer is objecting to the deal because of the current contract with Toshiba. Business analysts cannot predict what will happen over the next few months.
Toshiba was once on top of the world, now it is selling off pieces of the company. Can it survive? It signed a deal on Thursday to sell its computer memory chip business, so money is coming in. I am optimistic about its future, and use the poker phrase “Chip and a Chair,” meaning if it is still alive, if it has just one chip, it can still win.
Correction from previous edition: The revenue during the first half in Japan should read - 226.9 billion yen (US$2.08 billion)
Dominique K. Numakura, This email address is being protected from spambots. You need JavaScript enabled to view it.
DKN Research, www.dknresearch.com
DKN Research Newsletter #1728, October 1, 2017 (English Edition)(Micro Electronics & Packaging)
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Headlines of the Week
1. Canon will invest 23 billion yen to build a new plant in Miyazaki Prefecture for the production of digital cameras. The new plant will start the operation in August 2019.
2. Murata will commercialize a new RAIN RFID tag “LXFLANMXMG-003”. The new device is attachable on metallic surface.
3. Mitsui Chemical has agreed with Microwave Chemical to develop and commercialize the microwave process for various chemical reactions.
4. Taiyo Yuden commercialized a new 0201 size (0.25 x 0.125 x 0.125 mm) ceramic chip capacitor with 100pF capacity for next generation mobile devices.
5. Waseda University developed the world's first high-speed P/E conversion chip that can manage multiple signals same time.
6. Hitachi (Major electric & electronics company in Japan) 9/14 Has developed a new SiC base CMOS chip technology. The semiconductor chips are reliable under high temperature and irradiation.
7. Shimadzu will double the capacity of circuit board production in Philippines by 2019 adding more manufacturing lines.
8. Katolec has received an order of reliable circuit board modules from Mitsubishi Heavy Industry for the H3 Rockets of JAXA.
9. Mitsubishi Electric developed a SiC base power semiconductor chip with the smallest power loss.
10. Ushio Electric rolled out a new UV-LED dryer “UniJet iIII” with the highest irradiation power density for the inkjet printing process.
11. Toshiba developed a low-cost foldable solar cell module with a high conversion rate (10.5%) introducing perovskite compounds.
12. Idemitsu agreed to develop organic EL materials for next generation display devices with Toray, major organic material company inn Japan.
13. Keio Gijuku University codeveloped a robot hand system with a unique vision device. The robot can handle ripe fruits without damages.
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