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Nikkei BP “Leaders Talk about Their Company’s Technology Strategies and Product Strategies”

“Big data utilization is taking off in leaps and bounds.
Our goal is to use this as a springboard to realize further progress based on our ‘Small, Smart, Simple’ analog technologies.”

Yoshihide Fujii
Chairman SII Semiconductor Corporation

Yoshihide Fujii

Seiko Instruments Inc. (SII) and the Development Bank of Japan (DBJ) have established a new company called SII Semiconductor Corporation with SII’s semiconductor business at its core. The new company will start operating in January 2016 with a vision of “We inspire our customers with ‘Small, Smart, Simple’ analog semiconductor solutions that make full use of cutting-edge core technology”, and is aiming to be one of the world’s top five analog semiconductor manufacturers. We talked with Yoshihide Fujii, chairman, about the reason for establishing a new company and its future strategy.

――Please explain the background to the establishment of SII Semiconductor Corporation.

Fujii: Big data utilization is really taking off, and we are now entering an era where we will be surrounded by Internet of Things (IoT) equipment gathering all sorts of data. For a company such as ours whose strengths are in integrated circuits (ICs) for sensors and battery-powered ICs, this is like a strong tailwind.
The aim of establishing the new company is to make sure we can make the best of this once-in-a-lifetime opportunity by creating an organization that can carry out rapid and appropriate decision-making required in this new era. Being successful in the semiconductor business means making investments at the right time. The fact that the DBJ is providing us with such powerful backup will allow us greater freedom to make investments where appropriate.

Aiming for the top five

――Specifically how will you have greater freedom?

Fujii: First, we will have sufficient funds to invest in the development of advanced manufacturing processes and to make capital investments to increase production capacity.

In addition, with respect to product design, we will be able to enhance our design resources by recruiting excellent designers and engineers and by acquiring technology through M&A. To design the products required for the era of big data, we believe that it will be necessary to adopt a wider range of technologies. Furthermore, we will be able to expand our sales network, which is currently centered on Japan and Asia, to Europe and the United States. We now have the resources that will allow us to compete strongly for the next five to ten years. The next important step is to create specific measures to utilize these resources.

――What kind of semiconductor manufacturer is the new company aiming to become?

Fujii: We hope to make it a company where the employees can enjoy their work while feeling joy and pride in making new things. To achieve this, we will need to become a world leader in specific areas such as ICs for sensors and power supply ICs for battery-powered devices, and establish ourselves as a reliable presence in both society and the industry. If we can do this, our annual sales should reach 100 billion yen in the next five years, which will make us one of the world’s top five analog semiconductor companies.

――Why are you focusing on analog semiconductors?

Fujii: The concept of big data is the collection of data from the real world, and that data is full of analog information. As the big data field gains momentum there will be an explosive increase in demand for analog semiconductors, which are the point of contact between the real world and the virtual world. Our role is to develop analog semiconductors that will support IoT, and supply them in the necessary quantities in line with the anticipated dramatic improvements in big data processing capacity.

In addition, the spread of battery-powered equipment means that there is an increased need for high quality power supply ICs. We imagine that there will also be an increase in the use of power management technologies for energy harvesting that will render power supply wiring unnecessary. In accordance with our new corporate vision of “We inspire our customers with ‘Small, Smart, Simple’ analog semiconductor solutions that make full use of cutting-edge core technology”, we will continue to offer products that will satisfy the needs for these new applications.

Applying low power, high quality watch technologies to IoT

――Please tell us your greater competitive strengths compared with other companies.

Fujii: No one can beat us when it comes to driving electronic circuits on extremely low power. Our high quality process control technologies are also the envy of the world.

Our company’s DNA contains the technologies and know-how that have driven the Seiko brand watches, the pioneer of quartz watches, which are the smallest and at the same time the highest quality products used in industry today. We believe that these are the technologies that will help us meet the demands of the times. It goes without saying that IoT equipment requires extremely advanced low power operation. Moreover, the reliability of entire systems cannot be assured without high quality power supplies.

Customers in the IoT field will require the ultra-low power consumption and precision quality honed in Seiko watches, which have been telling the time accurately for many years.

――Please tell us the fields on which you will be focusing on development.

Fujii: We will be focusing on development on the five fields sometimes referred to as MERC2: Medical, which includes biological sensing and portable medical equipment; Energy, which includes smart houses and industrial equipment related to the Industry 4.0 concept; Robots such as nursing and guard robots; Cars, including advanced driver assistance systems (ADAS) and battery management systems (BMS); and Communications such as wireless power charging and smart cards. (See the figure below.)

In the immediate future, we are looking to expand our automotive products. We have lineups of EEPROMs that feature high quality and reliability, and ICs for power supplies and sensors that are low voltage, low power consuming, and highly accurate, while at the same time supporting a wide voltage range. We also plan to deploy our automotive products in the medical and robot markets, which demand the same high quality.

――What kinds of technologies will you develop for the applied markets that you are focusing on?

Fujii: Applied markets change extremely quickly and the technologies being used are constantly changing. We believe that our young employees, who hold the future in their hands, must cultivate the sensibility in developing the products that our customers and society need. We are already developing some interesting technologies. As part of a joint development project with Ritsumeikan University, we have developed a sensor system that does not require batteries but rather generates power from babies’ urine to notify parents when their baby’s diapers are wet. The value of this type of system is only immediately apparent to people who are in their child-raising years.

Our job is to propose technologies that our customers and society as a whole require, in an easy to understand way. So in addition to our analog semiconductors, which we call “peripherals,” we will also need to acquire interface technologies such as processors and digital signal processors (DSPs). We plan to strengthen our ties with semiconductor manufacturers that have these technologies, develop modules with the necessary functions, and provide the optimum solutions, so that we can continue to inspire our customers.

Big data image

● Figure : Focus markets of SII Semiconductor Corporation: MERC2
* MERC2= Abbreviation of Medical, Energy, Robot, Car and Communication

This article has been compiled from excerpts of articles appearing in the December 21, 2015 edition of Nikkei Business, the January 2016 edition of Nikkei Electronics, and the February 2016 edition of Nikkei Automotive with the permission of Nikkei Business Publications, Inc. Unauthorized copying is prohibited.