The production of electronic equipment is constantly shifting to Asia. Moreover, product design is also shifting to the Asian region. As a result, the importance of the Japanese market in the eyes of overseas companies has been relatively reduced.
However, Hakushima Masaki, who served as president of National Semiconductor (Japan) in April 2011, denied this view. "Our company still attaches great importance to the Japanese market" (and island). The reporter interviewed Hokkaido about the company’s emphasis on the Japanese market, the product areas that it valued, and the system that followed the Texas Instruments merger (which was scheduled to be implemented before the end of 2011). (Interviewer: Yamashita is better than himself)
Please first introduce the business situation of National Semiconductor in the Japanese market, that is, the business situation of National Semiconductor (Japan).
Hiroshima: Our company places the Japanese market's focus on the industrial electronic equipment market. Specifically, it is FA equipment, medical equipment, communication infrastructure equipment, and professional video equipment. Sales in the industrial electronics market accounted for a quarter of the total sales of National Semiconductor (Japan).
However, from the perspective of National Semiconductor, the proportion of sales is very different. The highest proportion of the overall market is the mobile device market, which accounts for a quarter of total sales. Japan's mobile device market sales ratio is less than 10%. Although smart phones in Japan are also very popular and sales account for more than half of mobile phones, many of the best-selling models are products of American manufacturers and Korean manufacturers. Of course, Japanese manufacturers are not to be outdone, but they have been overwhelmed by the momentum of overseas companies and cannot take the initiative. Product design is mainly completed by Taiwanese companies and Korean companies. Therefore, there are fewer support services (design-in, design support) for design activities in Japan. In general, even if mass production is performed in other regions, some sales revenue will be distributed to companies that provide design support. However, if there is less design support, our company's sales will not increase.
In other words, for national semiconductors, will the importance of the Japanese market gradually decline in the future?
And Island: This is not the case. We believe that in the future, Japanese companies will lead the global market and there will be markets that are expected to grow substantially. Specifically, there will be three markets, namely the automotive market including hybrid vehicles and electric vehicles (EVs), renewable energy markets, and high value-added consumer products (digital consumer) markets. Therefore, we still attach great importance to the Japanese market.
Is this the unique view of National Semiconductor (Japan) or the consensus of the entire national semiconductor?
Hedao: It is the consensus of the entire national semiconductor. In fact, our organizational structure has highlighted the characteristics of the Japanese market. Specifically, National Semiconductor divided the sales department into two. One company that operates existing products and another that runs Japanese companies is expected to lead the "Key Market" business in the global market. Key Market refers to the market that is currently under cultivation. Now, the department is actively developing and pre-selling new products (new technologies) in areas such as solar power systems, battery management, and digital consumption.
Please describe in detail what your company will develop in the Japanese market in the future.
Hedao: Here's a brief introduction to the auto market, energy market, and digital consumer market.
In the automotive market, we are vigorously developing battery management chips. The function of the battery management chip is to manage the capacity of a plurality of battery cells equipped in a car to increase the energy that can be used effectively. The battery management chip is currently equipped on hybrid vehicles. But all belong to passive products. When a passive product has a different storage capacity of a plurality of battery cells, the energy of a battery cell having a large storage capacity is forcibly consumed by a resistor, so that the capacity of each battery cell tends to be uniform. Therefore, energy efficiency is low. And our company is developing active products. When the capacities stored in the plurality of battery cells are different, the energy of the battery cells with more capacity can be transferred to other battery cells through the transformer. Therefore, energy efficiency is high. In addition, since the pressure applied to the battery cells during charging and discharging can be dispersed, the advantages of the battery cells can be extended.
Other competing companies are also vigorously developing active products, but some companies have suspended production due to increased chip costs. How does your company see the cost issue?
Kohei: The cost of active products is certainly higher than that of passive ones. Therefore, hybrid vehicles that have a small estimated battery energy capacity will not accept such products.
However, our company did not originally target the hybrid vehicle market. It intends to start with the electric vehicle market first. We believe that the batteries used in electric vehicles require a large amount of energy and the cost of the batteries themselves is relatively high. Therefore, the rising cost of battery management chips will not be a problem.
When will an electric car with an active battery management chip be available?
Hedao: We are currently certifying with an automotive manufacturer. It may be 2 to 3 years later.
In the energy market, what products will be vigorously developed?
Hiroshima: With regard to the energy market, we feel that there have been model changes in all aspects since the Great East Japan Earthquake.
Taking the solar power generation system as an example, it has been introduced by Early Adapters with a high awareness of environmental protection. After the earthquake, more and more people introduced such systems because they were eager to ensure power at the time of a disaster. It seems that we have entered the next stage from the stage of early adopters.
With regard to the LED driver ICs that are indispensable for LED lighting, the number of design projects after the earthquake increased, and the sales volume more than doubled. For example, when rebuilding the infrastructure and buildings that were destroyed during the earthquake, most of the power-saving LED lights were selected.
In the solar power system market, what chips will be developed?
Hedao: Will vigorously develop the "Solar Magic" chipset. In the United States, after installing a solar power system, there are many accidents caused by heat or fire. After a solar cell degrades, it can cause arc discharge or sparking. In order to prevent such accidents from happening, the United States introduced regulations in February 2011, requiring that the system must have the ability to shut down the system in the event of arcing, etc. The law will be implemented starting in 2015. The Solar Magic chipset is made up of three chips and firmware, which can realize the function of shutting down the system after detecting the arc discharge phenomenon. With the introduction of relevant regulations as an opportunity, sales of Solar Magic chipsets are expected to increase in the future.
What is the situation in the Japanese market?
Hiroshima: Japan has no relevant regulations. Although it is unclear whether any regulations will be made in the future, the possibility of following the United States will not be low. The reason for this is that I heard that in the earthquake, the solar power system was flooded by the tsunami, and when the power was restored after the tsunami retreated, there was a fire accident. Therefore, Solar Magic's chipset sales in Japan are also expected to increase.
In the digital consumer market, what chips will be developed?
And Island: The most developed non-contact charging technology. In particular, we are looking forward to the "Qi" standard defined by the WPC (Wireless Power Consortium) that our company has also joined. It is planned to commercialize a semiconductor chip that integrates a power supply circuit and a communication function.
In addition, we are also using semiconductor chip technology and packaging technology to develop new products that provide more convenience for digital consumer equipment manufacturers. However, it is not yet possible to disclose details.
At your press conference held in April 2011, you stated that before the merger by TI in late 2011, the two companies will operate as independent companies. However, it did not disclose the situation after the merger. National Semiconductor users should be very worried about changes after mergers. Please describe what you are currently aware of.
Hedao: The purpose of TI's M&A is not to improve profits through business rationalization. Instead, the speed of development is further accelerated by combining the two companies into one. Therefore, if the market is chaotic due to the elimination of varieties at the time of merger or the suspension of development, the significance of the merger of the two companies will be lost. We will merge in line with the principle of “developing new products rather than eliminating themâ€.
Specifically, there is no change in the model name of the semiconductor chip. Design and manufacturing are also the same as the original. Therefore, although the manufacturer's name has changed, the user does not need to re-certify the semiconductor chip. The blueprint for development will also be advanced as currently proposed.
How are the sales channels?
Hedao: In terms of sales channels, no decision has yet been made and it is estimated that it will be unified. It should converge into one window, one channel. As for how to unify, it should be announced earlier in 2012.
However, Hakushima Masaki, who served as president of National Semiconductor (Japan) in April 2011, denied this view. "Our company still attaches great importance to the Japanese market" (and island). The reporter interviewed Hokkaido about the company’s emphasis on the Japanese market, the product areas that it valued, and the system that followed the Texas Instruments merger (which was scheduled to be implemented before the end of 2011). (Interviewer: Yamashita is better than himself)
Please first introduce the business situation of National Semiconductor in the Japanese market, that is, the business situation of National Semiconductor (Japan).
Hiroshima: Our company places the Japanese market's focus on the industrial electronic equipment market. Specifically, it is FA equipment, medical equipment, communication infrastructure equipment, and professional video equipment. Sales in the industrial electronics market accounted for a quarter of the total sales of National Semiconductor (Japan).
However, from the perspective of National Semiconductor, the proportion of sales is very different. The highest proportion of the overall market is the mobile device market, which accounts for a quarter of total sales. Japan's mobile device market sales ratio is less than 10%. Although smart phones in Japan are also very popular and sales account for more than half of mobile phones, many of the best-selling models are products of American manufacturers and Korean manufacturers. Of course, Japanese manufacturers are not to be outdone, but they have been overwhelmed by the momentum of overseas companies and cannot take the initiative. Product design is mainly completed by Taiwanese companies and Korean companies. Therefore, there are fewer support services (design-in, design support) for design activities in Japan. In general, even if mass production is performed in other regions, some sales revenue will be distributed to companies that provide design support. However, if there is less design support, our company's sales will not increase.
In other words, for national semiconductors, will the importance of the Japanese market gradually decline in the future?
And Island: This is not the case. We believe that in the future, Japanese companies will lead the global market and there will be markets that are expected to grow substantially. Specifically, there will be three markets, namely the automotive market including hybrid vehicles and electric vehicles (EVs), renewable energy markets, and high value-added consumer products (digital consumer) markets. Therefore, we still attach great importance to the Japanese market.
Is this the unique view of National Semiconductor (Japan) or the consensus of the entire national semiconductor?
Hedao: It is the consensus of the entire national semiconductor. In fact, our organizational structure has highlighted the characteristics of the Japanese market. Specifically, National Semiconductor divided the sales department into two. One company that operates existing products and another that runs Japanese companies is expected to lead the "Key Market" business in the global market. Key Market refers to the market that is currently under cultivation. Now, the department is actively developing and pre-selling new products (new technologies) in areas such as solar power systems, battery management, and digital consumption.
Please describe in detail what your company will develop in the Japanese market in the future.
Hedao: Here's a brief introduction to the auto market, energy market, and digital consumer market.
In the automotive market, we are vigorously developing battery management chips. The function of the battery management chip is to manage the capacity of a plurality of battery cells equipped in a car to increase the energy that can be used effectively. The battery management chip is currently equipped on hybrid vehicles. But all belong to passive products. When a passive product has a different storage capacity of a plurality of battery cells, the energy of a battery cell having a large storage capacity is forcibly consumed by a resistor, so that the capacity of each battery cell tends to be uniform. Therefore, energy efficiency is low. And our company is developing active products. When the capacities stored in the plurality of battery cells are different, the energy of the battery cells with more capacity can be transferred to other battery cells through the transformer. Therefore, energy efficiency is high. In addition, since the pressure applied to the battery cells during charging and discharging can be dispersed, the advantages of the battery cells can be extended.
Other competing companies are also vigorously developing active products, but some companies have suspended production due to increased chip costs. How does your company see the cost issue?
Kohei: The cost of active products is certainly higher than that of passive ones. Therefore, hybrid vehicles that have a small estimated battery energy capacity will not accept such products.
However, our company did not originally target the hybrid vehicle market. It intends to start with the electric vehicle market first. We believe that the batteries used in electric vehicles require a large amount of energy and the cost of the batteries themselves is relatively high. Therefore, the rising cost of battery management chips will not be a problem.
When will an electric car with an active battery management chip be available?
Hedao: We are currently certifying with an automotive manufacturer. It may be 2 to 3 years later.
In the energy market, what products will be vigorously developed?
Hiroshima: With regard to the energy market, we feel that there have been model changes in all aspects since the Great East Japan Earthquake.
Taking the solar power generation system as an example, it has been introduced by Early Adapters with a high awareness of environmental protection. After the earthquake, more and more people introduced such systems because they were eager to ensure power at the time of a disaster. It seems that we have entered the next stage from the stage of early adopters.
With regard to the LED driver ICs that are indispensable for LED lighting, the number of design projects after the earthquake increased, and the sales volume more than doubled. For example, when rebuilding the infrastructure and buildings that were destroyed during the earthquake, most of the power-saving LED lights were selected.
In the solar power system market, what chips will be developed?
Hedao: Will vigorously develop the "Solar Magic" chipset. In the United States, after installing a solar power system, there are many accidents caused by heat or fire. After a solar cell degrades, it can cause arc discharge or sparking. In order to prevent such accidents from happening, the United States introduced regulations in February 2011, requiring that the system must have the ability to shut down the system in the event of arcing, etc. The law will be implemented starting in 2015. The Solar Magic chipset is made up of three chips and firmware, which can realize the function of shutting down the system after detecting the arc discharge phenomenon. With the introduction of relevant regulations as an opportunity, sales of Solar Magic chipsets are expected to increase in the future.
What is the situation in the Japanese market?
Hiroshima: Japan has no relevant regulations. Although it is unclear whether any regulations will be made in the future, the possibility of following the United States will not be low. The reason for this is that I heard that in the earthquake, the solar power system was flooded by the tsunami, and when the power was restored after the tsunami retreated, there was a fire accident. Therefore, Solar Magic's chipset sales in Japan are also expected to increase.
In the digital consumer market, what chips will be developed?
And Island: The most developed non-contact charging technology. In particular, we are looking forward to the "Qi" standard defined by the WPC (Wireless Power Consortium) that our company has also joined. It is planned to commercialize a semiconductor chip that integrates a power supply circuit and a communication function.
In addition, we are also using semiconductor chip technology and packaging technology to develop new products that provide more convenience for digital consumer equipment manufacturers. However, it is not yet possible to disclose details.
At your press conference held in April 2011, you stated that before the merger by TI in late 2011, the two companies will operate as independent companies. However, it did not disclose the situation after the merger. National Semiconductor users should be very worried about changes after mergers. Please describe what you are currently aware of.
Hedao: The purpose of TI's M&A is not to improve profits through business rationalization. Instead, the speed of development is further accelerated by combining the two companies into one. Therefore, if the market is chaotic due to the elimination of varieties at the time of merger or the suspension of development, the significance of the merger of the two companies will be lost. We will merge in line with the principle of “developing new products rather than eliminating themâ€.
Specifically, there is no change in the model name of the semiconductor chip. Design and manufacturing are also the same as the original. Therefore, although the manufacturer's name has changed, the user does not need to re-certify the semiconductor chip. The blueprint for development will also be advanced as currently proposed.
How are the sales channels?
Hedao: In terms of sales channels, no decision has yet been made and it is estimated that it will be unified. It should converge into one window, one channel. As for how to unify, it should be announced earlier in 2012.
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