Contributing to the World’s No. 1 Manufacturing by Applying Measurement Technologies to Semiconductor Production Equipment
The Tokyo Seimitsu Group is the industry’s only manufacturer of semiconductor production equipment that also has measurement technologies. To date, we have focused on sustaining stable earnings with businesses in different domains. Nowadays, with semiconductor devices reaching the limits of technological advancements, we believe we can make further advances by applying our measurement technology to semiconductor production equipment.
By doing so, we can contribute to the world’s No. 1 manufacturing by enabling even higher-precision inspection and processing. In our mid-term business plan for fiscal years 2022–2024, in addition to quantitative objectives we aim to enhance the technical synergies between the semiconductor production equipment business and the precision measuring instrument business.
Maintaining Technological Superiority in an Intensifying Market Environment
The semiconductor market continues to experience rapid advances in functionality and quantitative growth. To date, needs have been met through advances in front-end process technology for design shrinkage and larger diameter wafers. As we now approach the technological limits, the industry is seeking new solutions, such as 3D packaging, that can be realized with post-processing technology. The Tokyo Seimitsu Group offers a wide range of products for back-end processes, and I believe we can contribute greatly to this kind of innovation.
In addition, an increasing number of countries are now pursuing national policies to strengthen semiconductor production. While this move presents an opportunity for the Tokyo Seimitsu Group to expand its market, it also carries the risk of creating new competition. The Tokyo Seimitsu Group hopes to maintain its competitive advantage by investing in research and development to maintain its technological edge and by developing its service structure.
Expanding Solutions and Enhancing Overseas Sales
In the area of precision measuring instruments, which are essential for high-quality manufacturing, the Tokyo Seimitsu Group has maintained steady growth by capturing demand for measuring the dimensions and shapes of high-precision parts, especially for automobiles with internal combustion engines. Industry shifts toward energy conservation, fuel efficiency, and the unification of automobile platforms have also created new demand.
Global manufacturing demand has been stagnated due to COVID-19, which negatively affected our performance, along with that of other companies. Also, demand for precision measuring instruments itself has shifted, due to the shifts toward carbon neutrality and automation. Although precision measuring instruments are in high demand overseas, our ratio of overseas sales to total sales is not as high as for semiconductor production equipment. Accordingly, we intend to expand solutions and strengthen overseas sales.
Achieved Quantitative Targets, but Challenges Remain
The Tokyo Seimitsu Group disclosed its mid-term targets (maintain ROE at 10% or higher, consolidated operating profit of \22.0 billion) in May 2018.
In the semiconductor production equipment business, we expanded our product lineup, established a new application center, increased sales of consumables, and expanded capacity in anticipation of growth due to the spread of 5G (5th generation mobile communication systems) and increased demand for automotive semiconductors and from China.
In the precision measuring instrument business, we entered the charge/discharge testing system business, strengthened the service business related to automation and labor savings, and engaged in in-house production of key components, in anticipation of automobile platform innovation and increased demand for machine tools and aircraft-related products.
In fiscal year 2021, ROE was 17.4%, and consolidated operating profit was \28.3 billion. We met our quantitative targets, but we reflected some aspects of this plan into our next mid-term business plan, due to limits on production capacity and a faster-than-expected transition to new-energy vehicles (NEVs).
Capture Business Opportunities and Strengthen Initiatives in Growth Industries
The Tokyo Seimitsu Group announced a new mid-term business plan in May 2022.
The Group believes that the world of “Society 5.0,” meaning an integration of the virtual and physical society, will continue as 5G drives advances in communication technology. We also expect the semiconductor market to grow rapidly by both monetary and quantitative measures. In the market for precision measuring instruments, we expect to see a downturn in the market for internal-combustion engine (ICE) vehicles, but we anticipate an increase in new measurement needs related to NEVs and aircraft.
In the semiconductor production equipment business, we see business opportunities in the growing demand for testing equipment (Probing machines) and assembly equipment (Dicing machines, and Grinders) as semiconductor devices and electronic components become more sophisticated and complex. We also anticipate the expansion of market related to new compound semiconductors, such as those made of silicon carbide (SiC) and gallium nitride (GaN) with a view toward going carbon neutral. To this end, we will promote development that matches the needs of our customers and expand our business by developing new products in the processing equipment category.
In precision measuring instruments, we believe that the rapid shift in direction toward carbon neutrality and the expansion of the NEVs and renewable energy markets will stimulate new demand for measurement, as well as demand for automation in manufacturing in response to the declining workforce. We also believe the semiconductor-related market presents business opportunities. To this end, we will strengthen our efforts in growth industries, as well as in the charge/discharge testing business and automated solutions.
We are also stepping up our initiatives targeting a sustainable society. These efforts include the objective of reducing our CO₂ emissions by 50% of fiscal year 2018 levels by 2030.
The Tokyo Seimitsu Group has set the numerical targets of reaching ROE of 15% or higher, consolidated net sales of \170.0 billion, and consolidated operating profit of \37.5 billion by fiscal year 2024. In addition to advancing strategies for each business segment, we will also work to expand production capacity through a new plant we are building in the city of Hanno, Saitama Prefecture, as well as to strengthen our application capabilities.
Aiming for the World No. 1 in Manufacturing Giving Shape to Engineers’ Ideas
The Tokyo Seimitsu Group has a corporate culture in which experienced engineers confront customers’ issues head-on and pursue innovation based on their wisdom and experience.
Because this is an extremely important perspective, I always tell my engineers that I want them to reflect their own ideas in product development. The Company has established a system for executing development budgets in a way that gives concrete form to their ideas. Going forward, we will continue working alongside our customers to be the world's No. 1 in manufacturing.