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Vibrant SMEs of JAPAN

Increasing its Sense of Presence through Consistent Semiconductor Wafer Production [Shimane Masuda Electronics]

Secret to Robustness
  • Cost competitive strength that cannot be defeated even by China.
  • Technical strength for integrating components in a narrow area.
  • Established a consistent system in Thailand as well for division of production responsibilities.

Shimane Masuda Electronics (SME) is an independent semiconductor foundry company. Its strength is the ability to support consistent consignment of semiconductor wafer dicing, bonding, mounting, encapsulation, and testing using cutting-edge equipment. According to President Ishikawa, "A lot of companies specialize in assembly and testing, but there are few companies in Japan that have established an integrated system to handle everything from the raw material to the finished product." While SME is a medium sized company, its sense of presence in the industry is growing. Recently, the company was able to launch production in Thailand, giving it an early start as a domestic foundry as it steadily targets internationalization.

Speed, Low Costs, and Network

When the company was first founded in 1984, it leased equipment from a leading semiconductor manufacturer who also happened to be its only customer. However, SME became known for its speed, low costs, and network, and it now does business with over ten different companies. In the area of cost in particular, because of its relatively inexpensive personnel costs and its reinforced capability to make improvements, SME can proudly boast of "competitive strength that cannot be defeated even by China." In addition, the company's slim management system that includes just three full-time executives enables it to make decisions quickly, and the company is highly capable of supporting products with a short life cycle such as cell phones, PCs, and flat screen televisions.

On the other, the three keywords from a technical standpoint are SIP (System in Package), miniaturization, and high frequency. SME' real forte is module products that integrate components in a narrow area, and it first developed and mass produced mounted components 0.4 x 0.2 mm in size in cooperation with a customer in 2005. "At the time, we were the only company doing this in western Japan." The company has been mass producing gallium arsenide compound semiconductors since it was founded, and has 10 years of results in the area of 75 micrometer thin devices. It has also handled high frequency devices since its beginning, and one of its areas of pride is its ability to handle the entire process of contract manufacturing of high frequency products from start to finish. SEM has a wealth of experience and possesses assessment technology for the megahertz to gigahertz band. In addition, the company's substrate encapsulation process supports both printing and transfer molding methods.

Because of this type of advanced technical strength, the company's products cover a broad range including various amplifiers for cell phones, field-effect transistors (FET) for satellite broadcasting, ICs for digital televisions, and sensor ICs for gaming devices.

Producing General Purpose Products in Thailand

In order to further increase its cost competitiveness, SME launched mass production in Thailand in November 2013. In March 2013, the company established SMET, a wholly owned production subsidiary, and secured an approximately 6,400 square meter site in an industrial park in the Si Racha District of Chonburi Province. There, they constructed a 2,200 square meter building equipped with a Class 10,000 clean room and established a consistent system similar to that in Japan to handle everything from dicing to testing in the same plant. The subsidiary is producing cell phones and smartphone products, and those products are currently shipped back to Japan. However, the company is also considering supplying products directly to customers in Thailand and other parts of Asia.

The plant in Thailand is a production base for general purpose and low cost products. The production scale is currently about 2 million units per month, but there is still room for expansion, and that margin is likely to become a powerful weapon in the future. The catalyst that jump-started SME's move into Thailand was a request from a customer, but the company also decided that is would be "difficult to secure personnel in the vicinity of Masuda City. The only way to secure a large pool of human resources and also reduce costs was to advance overseas." The population of Masuda City is less than 50,000. The company prides itself in a high retention rate, but there are still limitations to the human resource supply. Thus, the decision to advance to an overseas location was necessary not only because of the customer's request but also because of the company's situation.

Goal: A production line that does not stop

In addition to overseas expansion, SME is also devoted to increasing the competitive strength of its headquarter plant, and as part of this effort, the company has focused its efforts on a PM (productive maintenance) activity since 2011. Recognizing that productivity can be improved by quickly stabilizing expensive, cutting-edge equipment, the company's objective with this activity is to train factory floor operators who are capable of performing even equipment maintenance, and to build "equipment and production lines that do not stop." The operators are certified in three stages: "SMO", which is the ability to manage equipment maintenance, "SLK", which is the ability to repair equipment and expand equipment types, and "SST", which is the ability to promote and execute equipment improvements. Currently almost all of SME's employees have obtained SMO certification, 17 are SLK certified, and 2 are now attempting to receive the highest certification level of SST.

Devoted to human resource development in order to target "a production line that does not stop"

Devoted to human resource development in order to target "a production line that does not stop"


Training Successors and Going Public

President Ishikawa, who assumed the top position in 2001 as the second president of the company, worked at an automotive company in Fukuoka, and had high hopes for the future as a salesman. Originally from the town of Tsuwano, which neighbors Masuda, Ishikawa participated as one of the founding members in the establishment of Shimane Masuda Electronics. Because the company is not a family-owned business, "the biggest issue is developing the next manager." While the company is steadily posting a profit and has no concerns financially, Ishikawa's future goal is to "develop the company so that we can take it public."

Company Data

President: Yuzuru Ishikawa

President: Yuzuru Ishikawa

Company name Shimane Masuda Electronics Co., Ltd.
President Yuzuru Ishikawa
Industry Type Assembly and inspection of semiconductor
Address 320-97 Muso-cho, Masuda City, Shimane Prefecture, Japan
Phone 0856-28-8100

Printing day:August 7, 2014

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