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Tokyo Electron: Japan’s biggest semiconductor equipment maker

Article - November 30, 2022

TEL is a market-leading manufacturer of equipment used to produce the state-of-the-art semiconductors needed for the digital technology we depend on every day.

A company that celebrates six decades of existence in 2023, Tokyo Electron (TEL) is a key player in what has become known as the ‘data age’. After all, TEL is a world-leading producer of the equipment used to manufacture semiconductors, which in turn are an essential component in smartphones, computers and a range of other connected digital devices that serve the everyday needs of an increasingly data-dependent society. “Semiconductor products are found everywhere,” says TEL’s representative director, president & CEO, Toshiki Kawai.

In the semiconductor industry, TEL stands alone in its ability to deliver manufacturing technology that covers four key front-end processes in the production of semiconductors: film deposition, coating/development, etching and cleaning. “We’re the only company in the world capable of providing solutions for all of these sequential key processes – we have equipment for each of them,” Mr. Kawai says. “What’s more, every product in our line-up has either the first or second market share in the world. Virtually every semiconductor in the world passes through our production equipment. Simply put, no cutting-edge semiconductor chip can be made without TEL’s technology.”

While TEL equipment is used across the globe, the Tokyo-based company places a focus on domestic development and production processes – a policy that helps it to remain at the forefront of its sector, Mr. Kawai declares. “Keeping our production, R&D and design bases in close proximity plays a crucial role both in our capacity to be innovative and in our ability to maintain a world-class workforce,” he says.

“We’re able to emphasize ‘concurrent engineering’, in which product development and mass production run in parallel and are ideally located near each other. This geographic proximity allows us to incorporate design, quality control and mass-production ideas at the development stage, enabling us to react swiftly to new ideas and maintain technological leadership. Furthermore, our model creates a working environment where employees feel a higher level of morale and a greater sense of responsibility, motivation and leadership, and this in turn creates pride among employees to produce the best products. This translates into an extremely low staff turnover rate. Within Japan, the percentage of our workers who leave their jobs is less than 1%.

“On the other hand, more than 80% of our sales are overseas, and one of our strengths is the support of local subsidiaries that respond appropriately and promptly to customer issues. In addition, company-wide policies are shared between the CEO and the presidents of our overseas subsidiaries at quarterly meetings.”

Ahead of its 60th anniversary, TEL has unveiled a new vision which, as the firm looks to the future, defines its focus: “A company filled with dreams and vitality that contributes to technological innovation in semiconductors.” Mr. Kawai explains: “The famous academic Michael Porter once theorized the necessity to create and abide by a set of ‘shared values’; values that are embraced on a global level. When articulating his vision, he believed that the creation of ‘shared values’ agreed upon by all TEL stakeholders was key to the advancement of humankind. TEL's new vision is based on the idea of ‘creating shared value’: the concept of creating social and economic value by leveraging corporate expertise to solve social issues, thereby enhancing corporate value and achieving sustainable growth. We’ll continue to develop our business activities based on the idea of ‘TEL's shared value’, which is to contribute to technological innovation in semiconductors.”

A company that also follows the mantra ‘Technology Enabling Life’, TEL embraces the critical role that semiconductors will have in building a sustainable future. “As the shift towards a data-driven society accelerates and efforts to solve global environmental issues progress, ‘Digital × Decarbonization’ has become a major trend worldwide,” Mr. Kawai notes. “The world is currently pushing firmly ahead with implementing ICT and DX as it takes action to realize a carbon-free society. Because of the ubiquity of semiconductors, the industry has a crucial part to play in this process.”

Semiconductors’ vital role is not only a consequence of their importance to the development of specific technology that can be harnessed to reduce negative environmental impacts, but also comes down to the contribution they can have in making digital systems as a whole more energy efficient, Mr. Kawai says. “I believe the key approaches in ‘Digital × Decarbonization’ efforts are ‘Green X Digital’ and ‘Green of Digital’,” he explains. “‘Green X Digital’ is realizing a green society by leveraging digital power such as leading-edge ICT, while ‘Green of Digital’ is promoting the reduction of energy consumption in digital infrastructure. The technological evolution of semiconductors is indispensable to realizing both of these.”

Increased efficiency is also among the ongoing advances in semiconductor technology that are needed simply to keep pace with humanity’s ever-growing data needs, Mr. Kawai says: “In our data-driven society, the volume of data communication is increasing by 26% per year. If data volume continues to increase at an annual rate of 26%, it’s expected to be 100 times the current level by 2040. To sustainably achieve this volume, we’ll require semiconductors that boast larger capacity, higher speed, more reliability and that consume less energy.”