Unlocking endless opportunities in isotropic graphite

Despite having lost its former dominance in terms of fab capacity and device production, Japan still provides 40% of globally consumed semiconductor materials and over 30% of semiconductor manufacturing equipment. Why was Japan able to preserve such a dominant market share in the semiconductor field?

In the fields surrounding semiconductor production, such as semiconductor materials and equipment, Japan’s technology and knowhow is higher when compared to its international competitors. This is especially relevant in the sector of machine tools, where Japanese makers pioneered the development of highly-sophisticated five-axle processing machines and micron-level precision machining centers. Semiconductor devices began with the development of transistors. As technology continued its relentless stride forward, semiconductors are now used for the development of nano scale devices. Consequently, the demand for accuracy and precision has drastically increased, and machining processes played a central role in achieving this level of precision. At TOYO TANSO, we supply materials critical to the production and  adequate functioning of these next-generation machining systems.

In recent times, our clients have required us to develop functional materials that can support the production of thinner, lighter, and stronger machines; a difficult request considering that micron-level precision must be maintained. To achieve this, knowing the characteristics of each material is of paramount importance, otherwise we would not be able to achieve the required precision. Furthermore, we are required to process these materials in harsh working-environments, such as vacuum chambers. This requires us to master a series of processes, including adjusting process temperature, controlling environmental resistance and ensuring uniform and adequate heat dissipation. If TOYO TANSO can perform such feats, it is because we have been able to holistically understand the characteristics of each material we utilize.

Mastering these processes is made further complex by the fact that the manufacturing environment always changes. In some cases, we are required to utilize different process gases or to change the frequency of the rotations. Device makers are always coming up with new sets of requirements and we, as a company, need to adapt to these changes. Our clients’ requests are in line with the trend to produce nanoscale devices. On top of that, they want to accelerate the manufacturing process by keeping optimum prices through mass production.

The purity of semiconductor materials has become increasingly important in the compound semiconductor field, especially as complex substrates such as gallium nitride (GaN) are increasingly utilized for high frequency applications. In a 2019 interview for The Worldfolio, you explained that supporting the compound semiconductor field was one of your strategies for growth. Two years later, what progress have you made?

A lot has changed since our last interview in 2019, and that is probably because of the pandemic. On the one hand, the automotive industry has suffered a great impact; on the other hand, there are high expectations as to the potential of compound semiconductors. In 2019, we made investments to ensure we could continuously improve the quality of the products we supply to wafer and compound semiconductor makers. We expected the volume of requests to increase, but due to the pandemic, it has actually slightly slowed down. Nevertheless, this slight decline has not affected our objective to continuously improve the quality of our products. For example, after putting strenuous efforts into R&D, we were able to upgrade the durability of our materials and to reduce the cost of our products and production process. These upgraded products are easier for our customers to use and their lifespan has been improved. Thank to these two technical advances, we were able to attract a series of new customers despite the pandemic.

Driven by regulations to limit CO2 emissions, the automotive industry is experiencing tremendous changes. On the one hand, the demand for eco-friendly vehicles is pushing the demand for lighter materials. On the other hand, car electrification and hybrid systems are altering traditional vehicle designs. TOYO TANSO developed PERMA-FOIL Graphite Sheets, a product that can be utilized to seal automotive gaskets and packing. How is TOYO TANSO answering to this demand for lighter-weight materials?

We are supplying a variety of products to the automotive industry, not just PERMA-FOIL graphite sheets. In recent years, we have conducted a lot of research and development to produce materials for this industry. Actually, we supply different kinds of products for different purposes. For example, we produce C/C composites such as Baskets and trays for the manufacturing process of gears and pistons. As our carbon boasts excellent self-lubricating properties together with superior wear and heat resistance,  our material is used for the vanes and rotors found in the rotating parts of electric vacuum pumps of brake assist systems. Our diversified expertise in the automotive field was made possible thanks to our close collaboration with parts manufacturers. We were able to reduce the cost of our products while achieving higher quality through mass productions. We are currently performing in the German and in the Japanese markets, and our share in the Chinese market is also growing. 

TOYO TANSO’s PERMAFOIL

Aside from the automotive and aerospace industries, we also supply our graphite material to various fields in heat treatment. Our products have attracted a lot of attention because we are able to express the full potential of isotropic graphite. Having holistically understood the characteristics of isotropic graphite, we contribute to the design and construction of heat-treatment furnaces. Heat-treatment furnaces are used to process metals, ceramic and a variety of other components. In these furnaces, heat treatment processes are conducted under extremely harsh conditions, with temperatures spiking above 1000 degrees Celsius, thereby rendering common metals, such as iron or stainless steel, inadequate. Because our isotropic graphite boasts excellent thermal durability, it is used in place of such metals to design heaters, processing jigs and similar components utilized in furnace interiors. In addition, our C/C composites allow us to propose measures to extend furnace life while reducing energy consumption.

Since C/C composites weigh only 1/5 of metal and have excellent thermal strength, switching to C/C composites for heat treatment components will allow us to process more parts and improve the durability of the components.

As a matter of fact, the demand for our C/C composites have increased significantly.

TOYO TANSO’s C/C Composites

Speaking of the automotive industry, we understand that car-makers are pushing towards EV adoption. As such, our aim is to develop the materials needed for the transition from combustion engine to electric vehicles to occur.

Your company was founded in 1941 and you will be celebrating your 80th anniversary this year, a major milestone. During these 80 years of existence, what has been the philosophy of TOYO TANSO?

Our company’s motto is to “produce something that is not found anywhere in the world.” Since the founding of this company, our predecessors have always attempted to develop new technologies  from scratch. Our predecessors made a lot of failures, but they never gave up in their quest for innovation. We continuously pour new ideas in order to develop new materials and most importantly, we respond to the needs of the market. This is the kind of mindset that we have upheld at Toyo Tanso for the past eighty years.

What new applications are you targeting for your isotropic graphite?

Our isotropic graphite has many applications because it has a number of excellent properties : it is stronger than the conventional graphite; it is resistant to extremely high temperatures, it has excellent electrical conductivity, it is chemically stable, and lightweight.

One of the products we have developed is called CNovel, which is used for many kinds of batteries, particularly for fuel cells.

TOYO TANSO’s CNovel

Industry experts are debating whether Fuel Cells or Lithium Ion batteries represent the best alternative to traditional power sources. Looking at the future, which of these two technologies do you believe will prevail?

It is hard to predict. While the market for  lithium-ion batteries is indeed growing, the power efficiency required of commercial vehicles, such as trucks or buses, is better achieved through fuel cells. Fuel cells show better efficiency and are well-applied to trains and aircraft.

Can you tell us more about EVEREDKOTE-B, your new TaC-coated Graphite, and its applications?

This product is mainly used for SiC semiconductor processes. This product consists of a specially developed high-purity isotropic graphite substrate coated with a dense tantalum carbide film via a proprietary chemical vapor deposition method. The hybrid material and the film strength have been drastically improved since last year, as we received an ever-increasing amount of order.

TOYO TANSO’s EVEREDKKOTE

What role does co-creation play as you continue to engage in your research and development? Are you looking for co-creation partners recently?

To continue the amelioration of our PERMA-FOIL technology, we are currently working with our partner to establish a joint-venture that is about to be launched. For our CNovel, we announced a series of improvements and we are already contributing to the production of fuel cells.

If we do everything on our own we will not be able to meet the expectations of our clients. As such, co-creation plays a vital role in our company.

In your message to your investors for the fiscal year 2020, you highlighted that the company needs to work on cost competitiveness, a common theme during this COVID-19 pandemic. How have you responded to the COVID-19 crisis and what are the changes made within the structure to improve your cost competitiveness?

Japan has been facing  demographic problems, including a decline in birth rates and an aging population. With regards to our manufacturing and planning activities, we have to consider what the future workforce of Japan will be like. For example, if the population continues to steeply decline, we should be able to address this problem by providing more automation in the manufacturing process. It is imperative for us to respond to whatever challenges may come along. To do so, we should always improve our technology and the quality of our products while maintaining a lower cost. If the population continues its decline, reducing cost will have to pass by improving our machinery and FA solutions.

Process technology is another key to maintaining cost-competitiveness. After successfully producing a material of better quality, we must understand how to reduce production cost. This is mainly achieved by reducing manufacturing lead time, energy consumption and human resources. We also have to increase the volume of production to benefit from economies of scale.

Most of our factories overseas are focused on processing, including heat treatment, coating and purification processes. Our strategy is to use these international locations to add-value to our products. We are seeing an increase in labor costs, particularly in Asian countries. Nevertheless, our goal remains the same: we must improve our process technology while controlling costs. In order to achieve this, we update our international factories by improving their machinery. We also dispatch our own engineers to educate local staff. We look into the capacity and productivity of our machines to see whether the efficiency is maximized or not; if we find any problems we fix them.

As the adoption of FA increases, how do you think the role of the operator and of the engineer will evolve?

I don’t think automation can add value to the whole assembling process. To successfully harvest the benefits of FA, one must first understand what one wishes to achieve. To do so, we must holistically consider the entire manufacturing flow and identify which part of the process can be automated, and why. Five years from now, the process will evolve even further and we will have more automated systems, therefore we have to remain flexible and make any changes or upgrades required. As successful automation requires a combination of engineering disciplines, both software and hardware, having engineers specialized in diverse applications is of paramount importance.

What countries are you looking to expand to?

We want to produce something that is beneficial to society and to our clients. To do so, we must work closely with our clients and carefully listen to their needs. As such, we do not target any particular country. Our goal is to penetrate the areas where our clients are located to support their local efforts.

In the distant future you will eventually retire and you will hand over the company to a next generation of executives. When that happens, what vision would you like your successor to embrace?

Our company’s vision is to create something that does not yet exist; this mindset should serve as the motivation for the next generation of executives and employees. For TOYO TANSO to remain successful, we must continue to innovate, create and improve. Consequently, fostering the right human resources is a focal point of our growth strategy because it plays a key role in developing and reinforcing our culture. As president, it is my responsibility to pass on to the next generation the company’s motto: “produce something that is not found anywhere in the world.”