Interview with the President
President/CEO Daisuke Ishizuka
──What kind of management philosophy do you conduct your business under?
SEMITEC was established in 1958 and is striving to be “forever a startup company”.
Thanks to this mindset, we have been able to establish sales and manufacturing facilities in many countries and regions and have grown to a total of 3,709 employees worldwide (as of March 31, 2021). As a company gets bigger, however, it can develop a rigid way of thinking over time, which prevents it from keeping pace with the speed of technological innovation. That is why it is crucial to always have a sense of crisis and equip yourself with an entrepreneurial spirit to continue pursuing the unknown.
To this end, we have established our corporate philosophy to “challenge the limits of imagination, pursue higher levels of technology, improve yourself, improve the company, increase the company’s value to society, increase your value to the company, pursue the company’s growth and your happiness”. These guiding principles were introduced back in October of 1991, but the mindset here is universal and has remained intact despite the passage of time.
──You have expanded overseas mainly into China, Korea, Taiwan, and Southeast Asia.
- As an international company, SEMITEC has increased the number of overseas sales and manufacturing locations but is now in the process of transitioning to the next new stage of becoming a global company.
You might think international and global companies are the same, but I view them to be different. International companies manage their operations centered in Japan, whereas global companies operate on the world stage without borders. We will change direction and center our operations around each overseas location.
──What specifically are you aiming for?
- Our overseas subsidiaries have traditionally been run by Japanese presidents, but this is no longer desirable in many cases. Generally, the person representing our company in a country should be from that same country. We would like to ensure that those familiar with the culture of the country can pave the way for further expanding business in that country.
For this reason, we are currently devoting our resources towards training local executive employees including the president. At one of the facilities in China, a local employee was recently appointed president. Similar actions will be taken to gradually replace the presidents at other SEMITEC companies abroad.
Such localization efforts will enable global sales expansion. Since different countries have different usage of products and require different products, changes must be made to offer products tailored to each country’s needs.
Of course, one of the reasons behind making these changes is Japan’s social issue of declining birth rate and aging population. Since Japan’s labor force will most certainly decline in the future, companies must implement globalization. True globalization however cannot be realized by simply pushing products produced in Japan overseas. We will carry out this change first.
──Will you continue your global expansion efforts in the future?
- We will of course increase overseas operations where necessary, but since the state of the world continues to change drastically, we need to keep a close eye on the situation.
──What is your viewpoint on the future sensor market?
- There have been three types of markets up to now. Low-cost mass production of standard products, semi-customization to meet customer needs, and full customization. I believe semi-customization will disappear over time and the market will become polarized, left with mass production and full customization. However, the quality of competitors in emerging countries is improving year by year, not only in the mass production realm but also in the full customization realm. This means it has become increasingly difficult to win customers with conventional Japanese quality. For this very reason, we must shift our focus to “solutions”.
──What is meant by shifting to “solutions”?
- Our core products are temperature sensors called thermistors. We have been selling these thermistors as “things” until now. Our customers are currently converting them to “solutions” and productizing them. For example, thermistors are used to measure the amount of gasoline left in automotive fuel tanks which allows the user to know the approximate time remaining before gasoline runs out. In this case, customers are converting a “thing” called thermistor into a problem-solving “solution” which can measure the amount of gasoline left. Please keep in mind that we have more knowledge about thermistors than anyone else. Measuring the amount of liquid remaining can have applications other than automobiles. We know that if thermistors are used in a certain way, they can be better utilized as “solutions”. Going forward, it is obviously important to expand our existing business, but we will also endeavor to promote new activities for proposing “solutions”. Customers also use thermistors as parts that are processed and customized on their end. Taking this into account, we also plan to establish a system to support such customization efforts.
──Will you go beyond just providing products?
- We have traditionally promoted our business mainly targeting manufacturers. There are now many emerging startup companies that are expected to become unicorns in the future. However, they do not know the product name, thermistor. What they want are “solutions” they would like to achieve. They are looking for a “solution” such as measuring the amount of gasoline left in a car, as mentioned earlier. By always asking ”Is it possible to do something like this?”, we would like to identify customer needs and focus first on businesses that are expected to eventually grow. Therefore, in April 2021, we established the Biosensing Business Development Headquarters and have started challenging ourselves to expand our possibilities.
──You are looking to develop new business, correct?
- We would like to partner with startup companies that bring unique perspectives and approaches. We would also like to expand our efforts to sell “solutions” overseas. Although we have sales and manufacturing sites overseas, we have thus far only been thinking about selling “things” which are products. Over the next 5 years, we will expand our sales of “solutions”.
──So you are going to accelerate this effort even further?
- Because our management philosophy is based on the pursuit of the unknown, we are actively carrying out joint research with universities. For example, we have developed an ultra-precise high-speed temperature sensor in collaboration with the National Institute of Technology / Hachinohe College and Hirosaki University. One potential application is, for this sensor to be used in a non-invasive device capable of performing definitive diagnosis or stage diagnosis of skin cancer, etc. without removing the affected area. As a sensor manufacturer, we would like to continue offering such added value.
We believe it is the medical-related field that will continue to grow in the future. We have also developed “Temperature sensors for medical devices and healthcare.” In Japan, where the birthrate is declining and the population is aging faster than the rest of the world, we can promote added value to other countries if we can take the initiative in the medical field.
Also, from the standpoint of SDGs, we believe our temperature sensor and optical sensor technologies can contribute significantly to improving the global environment.
──Please share your final thoughts and message
- With the global advancement of IoT, the field of sensing is gaining more attention. There are still many companies however, that have not been able to utilize sensing technology to their advantage. In addition, there are many products that companies want, but have fallen short of achieving the required performance.
We have accumulated a wealth of knowledge and cultivated an environment that facilitates R&D and innovation over many years. With this in mind, we would like to continue contributing to society through supporting our customers.
”Input”, “processing” and “output” are 3 functions fundamental to the world of computing and other areas. With the advent of AI, output and processing capabilities have taken a dramatic leap forward whereas input at the entrance, has been lagging. Moreover, if the input is “wrong”, it cannot produce “good output” no matter how much effort is devoted to analysis or algorithm development. Our value lies in this input. This is what we should be focusing our efforts on.
SEMITEC will continue to take on challenges to increase this value and meet the expectations of our stakeholders.
──Thank you very much for your time.