Process Technology Business

Business Summary from Group Executive

Set "CN" and "DS" on a springboard to achieve the NGK Group Vision

Director and Senior Vice President; Group Executive, Process Technology Business Group Ryohei Iwasaki Director and Senior Vice President;
Group Executive,
Process Technology Business Group
Ryohei Iwasaki

Towards realization of the NGK Group Vision:
Contributing to the development in semiconductors and the achievement of carbon neutrality

The environment around NGK Group is changing at a tremendous speed towards carbon neutral and digital society. It is difficult to predict exactly what society will be like in 2050, but VR (virtual reality) and AR (augmented reality) will be integrated into our daily lives, and automation will have advanced in all aspects, including autonomous driving. I also believe that the rules to protect the global environment will become stricter than we can anticipate. In such a society, the goal of the HPC Business, one of the businesses of this business group, is to contribute to the development of semiconductors used as the key devices in the social infrastructure that support people's lives, and the goal of the Industrial Process Business is to create a series of products and services that contribute to the realization of carbon neutrality.

HPC Business progresses the conversion toward smart factory through DX from this fiscal year. In addition to the introduction of automated warehouses and warehousing using QR labels and RFID tags, we will "visualize" the manufacturing history by utilizing the vast amount of data related to the manufacturing of each product.

Our aim is to achieve quick transfer of alert information to the previous and subsequent production process in order to prevent manufacturing defects.

The chamber components and thermal spraying businesses of FM Industries, our U.S. subsidiary, have been highly reputated for their ability to respond quickly to customer requirements, and we expect to expand our business in the future. We are preparing for future needs by expanding our facilities in California and Arizona.

With regard to Industrial Process Business, our aim is to contribute, through a succession of products and services, to carbon neutrality. We have established a marketing department and pursue cross-channel sales expansion of our business fields. Moving forward, we will expand our main focus beyond the domestic Japanese market to overseas markets, including Europe and the U.S., in order to concentrate on expanding existing business applications and sales, as well as development of new products and business. The innovative ceramic membranes that NGK is developing represent a core competency that we will capitalize upon through products and equipment capable of contributing to society's environmental needs, such as CO2 and nitrogen separation and the creation of a bioeconomy, and, thereby, reliably grow our carbon neutrality-related business.

Current situation and future outlook:
The impact of COVID-19 for the economy was not as negative as estimated

At the start of the financial period ended March 2021, the impact of the COVID-19 pandemic was concerned; however, as the business which our business group is engaged in is fundamentally close to an essential business, we were not significantly impacted. Rather, the demand by people staying at home has been a tailwind, and has driven up sales and profits overall.

The HPC Business saw significant growth in both ceramics for semiconductor manufacturing equipment and chamber components due to a recovery in investment in foundries and memory segments. On the other hand, fiscal 2021 will be a challenging year in terms of profit due to increased amortization of prior capital investments, increased development input to enhance competitiveness, and additional capacity expansion at FM Industries, whose business is rapidly expanding. We will strive to improve productivity and prepare for the expansion of semiconductor demand in the medium term.

With regard to Industrial Process Business, there was robust demand for membrane separating systems, particularly for purifying water for use in pharmaceutical production, and glass linings; however, because of a lack of demand for industrial heating systems, refractory products and energy plant-related systems, sales for the year were flat, with profits falling short of expectations. The main challenge for fiscal 2021 is reconstructing NGK Technocera Suzhou. Amidst increasingly active investment in lithium-ion batteries in anticipation of growing demand for EV, we have reached a ‘moment of truth' where we must figure out how we will overcome our Chinese competitors.

Our business group is also anticipating a favorable market environment for the period ending March 2022.

What sort of value can we deliver to our customers?

In the past few years, countries around the world have publicly committed themselves to reducing greenhouse gases, and this has catalyzed a major shift in global awareness and attitude.

As NGK make efforts to meet its corporate responsibilities with regard to carbon neutrality, our business group has the potential to contribute such activities through our wide-ranged products and business domains.

This high aim to reduce 50% of CO2 emissions by 2030 would bring us great opportunities to take a big leap forward if our products and services meet our customers' expectations.
Also, we should consider adopting a service-oriented business model that will enable us to receive consistent revenue.

We will continue to expand our business by clear understanding of the market's necessity, providing appropriate products and services, and receiving return by sharing such value we provide.

Note: This interview was conducted in June 2021.

Main market

[Capital investment in 300 mm wafer fab equipment]
Global market size: $56.7 billion
(2020 SEMI estimate)

Primary customers

Ceramic heaters
[Manufacturers of semiconductor manufacturing equipment]

Sales ratio by business

Sales ratio by business

Core products

Ceramic heaters

Ceramic heaters

Pedestals used to uniformly control the temperature of silicon wafers in the deposition process. The unique structure of a shaft bonded to the bottom of the heated pedestal, where wafers are placed, protects terminals and conducting wires from halogen gas.

Low-level radwaste treatment system

Low-level radwaste treatment system

The system has been adopted at nuclear power facilities throughout Japan and has been lauded for contributing to reducing waste by the highly recognized for its extremely effective dust removal and safety.

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