Digital Society Business

Become a pillar of growth by incorporating added value to increase competitiveness and contribute to problem resolution for the digital society.

The Digital Society Business Group comprises businesses related to the digital society (DS). Engaging in three segments, the SPE Business (products for semiconductor manufacturing equipment), the Electronic Device Business, and the New Metals Business. Through these businesses, we will advance the dissemination of products that contribute to resolving the various problems facing the digital society. The most important mission of this business group is to grow into a second core business after the Automotive Ceramics Business. Specifically, we have outlined the earnings target of achieving net sales of over 300 billion yen in 2030, which would represent a three-fold increase over FY2023.

Currently, the semiconductor and information communications markets are struggling to see a recovery in demand but, over the medium to long-term, these markets are expected to see growth driven by advancements in Beyond 5G, AI, and edge computing. We also project demand growth and business expansion for our DS-related products, and will work to develop high-added-value products that incorporate our proprietary technology. NV1000 (the goal of net sales of 100 billion yen or more from new products), is a target we have outlined for 2030 as a milestone on our way to realizing the NGK Group Vision 2050. To achieve this target, we are applying a sense of urgency in our new product development. Specifically, for DS-related products, we will expand the CMOS package business, which is expected to see growth in the imaging and communications sectors, and aim for the rapid commercialization of bonded wafers, which are used in optical communications and mobility sensors.

In the carbon neutrality domain, we are projecting demand growth for Silicon Nitride (SN*) AMB substrates, which are seeing growing adoption for use in the power modules of EVs driven by increasing EV adoption. We will also consider developing materials for hydrogen infrastructure to support the full-scale realization of a hydrogen-based society.

As a business group that seeks to bring various new products to growth sectors, we play a leading role in Commercialization, one of the Five Transformations the NGK Group is pursing towards realizing our Group Vision. We will collaborate with Corporate NV Creation, the division in charge of marketing, and utilize alliances and cross-sector partnerships to accurately identify market needs and technology trends. We will propose high-value-added products and solutions that incorporate proprietary technology to contribute to problem resolution in a continuously evolving digital society.

*SN:Si₃N₄(silicon nitride)

Business overview and outlook

During FY2023, sales decreased despite the positive impact of yen depreciation. Constraints on semiconductor and data center investments caused prolonged inventory adjustment periods, which in turn triggered a decline in shipments of products for semiconductor manufacturing equipment, piezoelectric micro-actuators for hard disk drives (HDDs), and other products.

For FY2024, we are forecasting a gradual recovery in market conditions for digital-related products from the second half of the fiscal year. To ensure we capture demand as the market recovers, we will continue with investments for production expansion while also advancing the development of next-generation products and developing new clientele. At the same time, we will also reevaluate the production structure of each business to promote cost reductions and DX initiatives as we aim to improve profitability.

Note: This interview was conducted in April 2024.