Innovation behind the scenes

What do Japanese manufacturers have that their competitors in China and Korea do not?

First, ROHM has always applied the strictest standards of quality to all of its products and processes, and we strive to improve our activities every day. Second, we hold customer satisfaction as one of the key priorities for business success. In addition, one of our core characteristics is that this philosophy is not only shared by our top management, it is embraced by all employees. While I am sure that the same applies for non-Japanese companies, I believe that most Japanese corporations feel stronger regarding this matter.

Which applications will you prioritize in the future?

With the emergence of Internet of Things, digitalization, and more innovative solutions in various applications, we expect the demand for our products to witness significant growth. So, looking to the future, we will be putting our focus on the automotive and industrial segments. Today, around 40% of our sales ratio comes from these two areas. Within the next five years, our objective is to push it to 50%.

In the automotive market, the use of electronics is expanding with the increasing demand for ADAS (advanced driver-assistance systems) and EVs (electronic vehicles). Furthermore, the industrial segment is expected to grow dramatically with the arrival of the 4^th industrial revolution.

From the creation of the first Japanese base in Silicon Valley to the world’s first wireless chip, ROHM is a historical innovator. What managerial actions do you implement to keep that culture of creation?

Our founder, Mr. Sato, got his first patent for resistors while he was still a student. When we began producing semiconductors at the end of the 60’s, we had no means or money. We expanded our portfolio and established a base in the Silicon Valley to find innovative ways to produce and create more products. Mr. Sato still comes to the office every day, and innovation continues to be the foundation from which ROHM stands upon; it is embedded in our company’s history.

Your company is a true international player, with bases all over the world. Around 70% of your sales ratio comes from overseas. Asia represents around 60%, with the Americas and Europe at approximately 5% and 4%, respectively. Which geographical markets will you prioritize for future growth?

We divided our sales ratio into four markets: Japan, Asia (including China), US, and Europe. In Europe, the automotive and industry markets account for around 80% of semiconductor demand, perfectly matching our mid-term strategy. Looking ahead, Europe will grow increasingly important to us, so we will further focus our efforts there. The US is important because they are constantly creating new technologies and solutions. This creative edge makes America a great place for R&D. Furthermore, we all know the automotive capacity of America, both in terms of innovation and production, which further enhances our interest. In Asia, we are targeting our efforts on China. With its rising middle class, China is showing increased demand for smartphones and sophisticated consumer electronics, markets that are important to us.

Both domestically and abroad, the semiconductor and IC market is growing increasingly competitive. What are the competitive advantages of ROHM?

There are three points. First, ROHM began by offering resistors, and then expanded to LSIs and discrete semiconductors. In today’s market, there aren’t many companies in the world with a business style that offers a one-stop-shop for customers. Furthermore, while our competitors are only able to offer a few different products, we are able to provide a broad portfolio which leverages upon a wide range of technologies and solutions. By choosing ROHM as a business partner, customers are able to focus on one supplier only. Combining our diversified expertise allows us to create value for ourselves.

Second, we utilize a vertically integrated production system, meaning that our entire manufacturing process, from A to Z, is conducted in-house. As I mentioned earlier, our company motto is “Quality First,” and to ensure that quality, we manufacture everything ourselves, including all phases of production and test equipment. This allows us to have complete control over our processes and end-products. ROHM incorporates the highest quality standards into all of its processes and ensures traceability to provide customers not only with superior products, but greater reliability as well.

Lastly, we always conduct our sales in a direct manner. Our sales offices are located close to our customers, so that when they need something, we are able to respond in a timely manner. This proximity also allows us to quickly monitor and address their problems and demands.

What legacy would you like to leave behind at ROHM?

In the 80’s and the 90’s, Japan used to be number one in manufacturing. However, in recent years we have seen Korean and even Chinese corporations beginning to dominate certain sectors. Like many other Japanese companies, we are struggling. But I believe that switching our focus from the consumer to the automotive and industrial segments will allow us to be successful. Our international operations over the last few years have been on the rise. We will continue to accelerate business expansion and production to help ROHM grow again.