Toden Electronics, which started as a technology trading company, initially assumed the task of introducing advanced American technology for Japanese semiconductor companies such as NEC, Toshiba, and Hitachi. Along with the development of Japanese semiconductor companies, the founder of Dongdian Electronics felt the coming of the Japanese semiconductor era. So, decided to enter the field of semiconductor equipment, determined to become an independent semiconductor equipment supplier.
In the new 2018 revenue ranking of semiconductor equipment companies launched by the Core Thought Research Institute, TEL ranked second, with revenue reaching US$11.6 billion, an increase of 27% over 2017.
Let’s follow the author to understand the development of Dongdian Electronics.
1. Start by relying on agency trade
On November 11, 1963, Tokuo Kubo and Toshio Kodaka established Tokyo Broadcasting System (TBS) 5 million yen in Tokyo. Electron Laboratories, Inc.).
Named the research institute, it is actually a trading company. On the one hand, it is engaged in the import of IC testing tools and semiconductor equipment parts; on the other hand, it exports car radios made in Japan.
It is reported that the original intention of setting up the company was to be dissatisfied with the short-sighted behavior of the trading company where he worked, “as long as the product is sold, nothing else matters”, and felt that it was necessary to do a good job in after-sales service of the product, otherwise it would be difficult to achieve long-term customer satisfaction.
In 1965, Dongdian Electronics became the agent of Fairchild test equipment in Japan, including IC test equipment, test sockets and various connectors.
At that time, the Japanese semiconductor industry was just starting, and the company paid attention to after-sales service. As a result, IC testing equipment sold rapidly, bringing good cash flow to the company.
2. Gradually transform equipment manufacturers
In 1968, TEL-Thermco Engineering Co., Ltd. was established as a joint venture with Thermco Products, and began to produce diffusion furnaces for semiconductors in Japan. This was the first semiconductor equipment manufacturer in Japan. In 1970, the joint venture company completed the first diffusion furnace produced in Japan in Yokohama, and began to take the first step in the localization of semiconductor equipment in Japan.
The author believes that there are two reasons for Dongden Electronics to transform from a trading company to a semiconductor equipment manufacturer. “: Abandoning the gold standard, stopping the exchange of US dollars for gold, and imposing a 10% import surcharge. This led to the collapse of the “Bretton Woods System” after World War II, which seriously damaged the interests of many countries and exacerbated international economic and financial turmoil) and The 1973 oil crisis hit the Japanese economy hard.
The second reason for the transformation of Dongdian Electronics is more important, that is, it has seen the development of the Japanese semiconductor industry and the Japanese government’s emphasis on the localization of semiconductor equipment. At that time, the Japanese government implemented import protection measures for the semiconductor industry on the one hand, and on the other hand increased its support for semiconductors. For example, the proportion of government subsidies for research and development expenditures rose rapidly from less than 2% before 1970 to 13% in 1973 and 1976. 26% of the year. At the same time, the Japanese electronics industry also began to import semiconductors into Electronic products.
Therefore, the company decided to turn to the high-yield semiconductor manufacturing equipment manufacturing field and completely withdraw from the consumer electronics market such as car radios, which accounted for 60% of its business revenue. It is reported that this transformation took a full three years, and it was not until 1975 that the loss was reversed. Revenue rose 14% in 1976, and profits rose 100%.
In 1978, Tokyo Electron Research Institute changed its name to Tokyo Electron Ltd. and established Japan’s first IC testing center.
3. Access to advanced technology through joint ventures
In 1976, TEL-Thermco launched the world’s first high-pressure oxidation-diffusion furnace. Through the joint venture with Thermco, TEL-Thermco tasted the thrill of acquiring technology.
In the 1980s, Dongdian Electronics further actively promoted the localization of semiconductor manufacturing equipment. Through joint ventures with American semiconductor equipment companies, advanced technology is introduced from the United States and integrated with its own manufacturing technology.
In 1981, it established a joint venture with GenRad to produce online testers in Japan; in 1982, it established a joint venture with Varian Associates Inc. to produce ion implantation equipment in Japan; in 1983, it established a joint venture with Lam Research to produce ion implantation equipment in Japan Etching machines are produced locally in Japan.
By 1988, Dongdian Electronics acquired all the shares in the hands of its partners and turned the joint venture into a wholly-owned company.
In 1989, Dongdian Electronics’ semiconductor manufacturing equipment revenue exceeded 600 million US dollars, ranking first in the world, and won the championship for three consecutive years.
In 1994, Dongdian Electronics launched a monolithic CVD system. In 1998, the 12-inch equipment R&D center was established.
Today, TDC’s products cover almost all processes in the semiconductor manufacturing process. Six categories of products include: glue/developing equipment, plasma etching systems, thermal processing equipment, single-wafer deposition systems, cleaning systems used in wafer processing, and wafer testing equipment. In addition, electrochemical deposition systems and wafer bonders for advanced packaging processes are available. Dongdian Electronics also provides panel manufacturing equipment.
Among them, the glue/developing equipment has a global share of 87%. In panel manufacturing equipment, etching machines account for 70%.
4. Overseas expansion of Dongdian Electronics
Before the 1990s, Dongdian Electronics only had sales and service points in the United States. In 1994, Dongdian Electronics took a key step to go overseas and began to build a sales and service network in Europe and South Korea. Previously, Dongdian Electronics’ overseas sales revenue was less than 20%. In fiscal year 1999 (April 1998 to March 1999), the overseas sales revenue surpassed the domestic revenue in Japan and became a veritable global enterprise.
Gradually establish R&D centers around the world, integrate advantageous resources from all over the world, and accelerate the progress of R&D. In 1995, Dongdian Electronics established its first overseas R&D center in the United States, and then set up three overseas R&D centers in South Korea and Taiwan.
As of March 31, 2018, Dongdian Electronics has 34 companies and 76 business locations in 16 countries and regions around the world. In fiscal year 2018 (April 2017 to March 2018), Tepco’s overseas markets contributed more than 85% of its revenue.
Since the establishment of the company in Shanghai, China in 2002, it currently has three subsidiaries in mainland China: Dongdian Electronics (Shanghai) Co., Ltd., established in 2002, mainly engaged in the sales and service of Dongdian Electronics in China; Dongdian Semiconductor Equipment (Shanghai) Co., Ltd., established in 2003, is mainly engaged in the supply of parts to Dongdian Electronics in mainland China; Dongdian Optoelectronics Semiconductor Equipment (Kunshan) Co., Ltd., established in 2011, mainly engaged in the production and maintenance of FPD manufacturing equipment.
In fiscal 2018, its semiconductor equipment revenue in mainland China accounted for about 10% of its global revenue, while in fiscal 2000, revenue in mainland China accounted for less than 2% of its global revenue.
5. The localization of equipment helps Japan to become a dominant position
At the initial stage, the Japanese government and companies have clear policies on how to develop semiconductor technology in the future and how to localize related manufacturing equipment. This is an important reason why Japan quickly surpassed other countries.
First of all, in terms of technology, Japan focuses on the development of manufacturing equipment for micro-processing. In order to increase the capacity from 1K to 1M, the interval between semiconductor circuits needs to be shortened, which requires precision processing technology and related equipment. Under the coordination of the Ministry of International Trade and Industry of Japan, the research and development of related equipment has progressed quite smoothly. Before 1975, Japan’s semiconductor manufacturing equipment was basically imported from abroad; but by the early 1980s, more than 70% of the semiconductor manufacturing equipment could be manufactured by Japan itself.
Japanese semiconductor companies have both advantages in manufacturing technology and can update equipment locally, and their technical level has been continuously improved, making the world look at Japan with admiration.
By 1985, Japanese semiconductor companies and American semiconductor companies had changed their roles in terms of market share, with Japan first and the United States second. Among the top ten semiconductor companies in the world that year, there were five in Japan, NEC (first), Hitachi (third), Toshiba (fifth), Fujitsu (sixth), and Panasonic (ninth); by 1995, the world’s top ten Large and medium, Japan still has five, NEC (second), Toshiba (third), Hitachi (fourth), Fujitsu (eighth), Mitsubishi (ninth).
6. Reflections on the rise of China’s domestic equipment
In general, the development of Japanese semiconductor equipment has gone through four periods: one is the leading stage of imported equipment (before 1975); the second is the establishment stage of domestic equipment (1976-1982); the third is the self-sufficiency stage (1983-1994) ; Fourth, the comprehensive export stage (1995-present).
In fact, before 2008, my country’s semiconductor equipment basically relied on imports. In 2009, the state established the national science and technology major project “Very Large Scale Integrated Circuit Manufacturing Equipment and Complete Process Technology Project (Special 02)” to research and develop localized equipment.
Under the overall planning of the 02 special project, domestic semiconductor equipment manufacturers have divided labor and cooperated, covering the main equipment types of semiconductors, such as etching machines, thin film equipment, diffusion ion implantation equipment, wet equipment, and CMP.
However, as the physical limit approaches, technological progress is slowing down. Although domestic manufacturers are still in the period of technological catch-up, the gap with the global leading technology is gradually narrowing.
However, the development of integrated circuit manufacturing in mainland China is now a contradiction. In mass production, once there is a problem with the manufacturing equipment, the wafers on the entire production line may be scrapped, and it needs to be shut down for inspection and maintenance. For the fab, the cost is very high, and it is impossible to provide domestic equipment companies with more tests. wrong chance. When domestic equipment is developed, if there is no chance for trial and error, how can it be improved and iterated.
Although Japan relies on joint ventures for technological success, we cannot copy the Japanese experience. After all, 12-inch devices are different from 4- and 6-inch devices.