Business Summary from Group Executive
Riding the wave of a changing environment to threefold growth in sales by 2030
Electronics Business Group
Towards realization of the NGK Group Vision：
Pursuing new possibilities with new products that support a digital society
As we move toward the future society of 2050, the environment all around us is undergoing major changes, including advances in high-speed, high-capacity communications, an accelerating shift towards EV, transitioning to natural energy and the arrival of a hydrogen-based society. Our business group has developed a long-term business plan and set targets for 2030 based on how we anticipate society will change. We aim to grow our sales approximately threefold by 2030 compared to their current level.
When you consider the key characteristics of our business group's product lineups in light of the NGK Group Vision's focus on carbon neutrality (CN) and digital society (DS), you see that we have a lot to offer in these fields, particularly in the area of digital society. With 5G becoming increasingly widespread, the number of high-performance filters used on a single smartphone is increasing, which means we anticipate medium-to-long-term growth in demand for bonded wafers. And, of course, even more possibilities open up for us to pursue when we look past 5G to 6G and at the introduction of new telecommunications standards such as those related to millimeter waves, as well as when we think about potential applications for various sensing devices. In addition, we are working on combining our unique process technologies with new materials to come up with structural and functional products aimed at the semiconductor and health care fields and developing business in entirely new fields.
For our commercially available EnerCera® lithium-ion rechargeable batteries, beyond smart card and wearables applications, we are looking into industrial applications, such as IoT (Internet of things) applications in factories and stores and quality control applications in shipping, as well as applications in a variety of other fields.
With technological innovation being driven by advancements in high-speed, high-capacity telecommunications and increasingly diverse data utilization scenarios, this is a perfect growth opportunity for bonded wafers, hard disk drive (HDD) piezoelectric micro-actuators and EnerCera to be further developed as products contributing to the realization of a digital society.
We are also pursuing product development in the area of carbon neutrality, which represents the other pillar of the NGK Group Vision. For the time being, our main focus is DCB and AMB substrates (for power modules). The growth in demand for vehicular power modules that will accompany the trend towards electric motor adoption clearly signals an expansion in customer adoption for EV (electric vehicles), HEV (hybrid electric vehicles) and PHV (plug-in hybrid vehicles).
Also, amidst ongoing carbon recycling-related initiatives and other initiatives aimed at realizing a low-carbon society, we anticipate growth in hydrogen-related infrastructural systems. We will work on expanding applications of beryllium copper alloy materials, taking advantage of the fact that they offer high thermal conductivity, excellent strength properties and do not degrade when exposed to hydrogen, in order to contribute to the creation of a hydrogen-based society.
Helping achieve our vision through stronger 'product manufacturing' and 'solutions manufacturing'
With the aim of helping realize the NGK Group Vision, we are pursuing future growth that is based not only on 'product manufacturing,' by which we will continue to offer products that give us competitive strength, but also on 'solutions manufacturing,' by which we go beyond offering products to also the accompanying applications. Currently, the main products underpinning our business group include piezoelectric micro-actuators for HDDs, bonded wafers and beryllium copper strips, all of which have set customers and applications and, through the use of technology which sets us apart from our competitors by meeting highly difficult specifications, have fostered our growth thus far. However, EnerCera differs notably from these products in that it requires "marketing which motivates customers." In other words, we must work on the customers, develop applications and build a market for EnerCera. Customers will not be able to completely utilize the batteries if we simply sell them and ask them to try them out. It is important that we develop and demonstrate applications that the customers themselves are not yet aware of.
Current situation and future outlook：
Anticipating increased profits due to increased demand and improved profitability
For the fiscal year ended March 2021, during the first quarter, the spread of the COVID-19 pandemic resulted in a drop in shipments to China and South Korea for our Electronics Business as a whole, as well as other effects, including a suspension in operations at the Malaysian production facility of our Package Business. The latter half of the year saw an incremental recovery in the market, centering on the Chinese automotive industry. With regard to specific products, while demand for piezoelectric micro-actuators for HDDs and bonded wafers increased, demand for mobile phone base station ceramic packages declined. This was also accompanied by sales of shares and fourth quarter exclusion from consolidation of Soshin Electric, resulting in reduced sales, while operating income increased due to higher demand and reduced costs.
For the fiscal year ending March 2022, we anticipate that electronic components-related business will see increased demand for piezoelectric micro-actuators for HDDs and package-related products, while metal-related business will see favorable movement upward in sales of beryllium copper alloy products. On the other hand, however, as a result of the change in the basis by which bonded wafer sales are recorded, as well as the exclusion from consolidation of Soshin Electric, we foresee decreased revenue for our business group as a whole. As for profitability, we anticipate that increased demand in metal-related business and electronic components-related business, as well as the return to profit of NGK Group company NGK Electronics Devices, will help provide us with increased profits.
Note: This interview was conducted in June 2021.
[Amount of digital data generated and transmitted worldwide]
Average annual growth rate of approximately 30%
Amount in 2025 will be more than five times that of 2018: 175 ZB
(zettabytes: 1 trillion gigabytes) (IDEMA Japan estimate)
[Piezoelectric devices for HDDs, bonded wafers, etc.]
Manufacturers of HDDs, communication devices
Sales ratio by business
Piezoelectric micro-actuators for HDDs
Micro-actuators are indispensable for performing precise control of magnetic heads in HDDs. As the key device enabling both high capacity and reliability in HDDs, our ultra-compact micro-actuators are used in data centers throughout the world.
Bonded wafers are substrates for electronic devices developed by proprietary bonding technologies and ultra-high-precision wafer polishing technologies cultivated in the ceramics business. Combining different materials makes it possible for bonded wafers to deliver performance and functionality beyond wafers made from a single material.
Beryllium copper alloy
From 0.045 mm sheets and coils to bars and wire a mere 0.05 mm in diameter, we can provide the right alloy mix with a variety of hardness to meet customer needs. Beryllium copper alloys boast outstanding strength, conductivity, fatigue resistance, high-temperature characteristics, workability, and resistance to corrosion.