Aggressive Expansion in 5G, Automobile, and Other Growth Markets:
Kyocera’s Core Components Business Segment
Kyocera carried out its largest-ever organizational reforms, consolidating its existing businesses into three segments, one of which is the Core Components Business. In order to achieve growth, this segment is planning to promote collaboration among business lines internally to reinforce the management base and focus on growing markets. What are its specific growth strategies and approaches? Hiroshi Fure, Director, Managing Executive Officer, and Executive General Manager of the Core Components Business, shared details on the division’s strategy.
Solidifying the management foundation based on cross-functional collaboration
In April 2021, Kyocera executed large-scale organizational reforms to achieve a corporate structure that enables speedy decision-making and dynamic management. The reforms’ major purpose was to consolidate the company’s diverse business lines into three segments. The Core Components Business Segment, one of the three, includes business units of Automotive Components, Optical Components, Semiconductor related Components, Medical Devices, Jewelry, and Fine Ceramic Components (long-stranding division on which Kyocera was founded).
ー Would you tell us about your plans to create synergy among the various businesses?
Fure：One of the major benefits of the recent reform is the development of a management structure that allows for timely decision-making. This is particularly important for implementing plans for capital investment and human resource utilization in high-growth areas amid rapid changes in the business environment. Also, by facilitating closer collaboration and information sharing across the seven business units, we will be able to apply the strengths of each unit to others and address common issues efficiently by working together. Toward this purpose, we are promoting cross-functional projects in four functional areas to solidify the management foundation to underpin strong business growth. In the Technology Promotion project, relevant engineers from each unit work together to address specific priority issues in combination with skills training and development programs. The Strategic Planning project is tasked with reviewing core technologies and development themes as well as exploring new products, core business competencies, and planning future growth strategies. Finally, the Human Resources Development (HRD) and Quality Management System (QMS) projects are responsible for strengthening personnel and organizational capabilities in order to reinforce growth.
Boosting production capacity and new product development targeted at growing markets
ー Could you explain about some of the target business areas?
Fure：We are focusing on two targets. One is the semiconductor-related business, which is driven by growth in the information and communications market. Our challenge is to effectively meet the increasing demand for fine ceramic components for semiconductor processing equipment (SPE) as well as ceramic packages for semiconductors and organic circuit boards. We are working on both production facility and human resource investments to expand production capacity in and outside of Japan. The other target is the automotive components business, in which we are striving to respond to robust demand, especially for products related to advanced driver-assistance systems (ADAS). In order to meet the rising demand for in-vehicle sensors, processors, and camera modules, we are increasing production capacity for these products, chiefly at our Thailand plant.
ー New product development plans are also underway at a steady pace. Could you tell us more details?
Fure：Yes, we are pursuing two different directions for product development. The first is evolving existing products. Kyocera has a proven track record of providing SPE components and semiconductor packages, among others, adopted for cutting-edge technologies. Drawing on this track record and utilizing our information networks, we are promoting technological development efforts to upgrade products to satisfy requirements from next-generation technology industries. The second is combining core technologies to create new products. Taking this approach in the past, Kyocera has made a number of achievements. For example, we applied our fine ceramic technology to the development and mass-production of cell stacks, the heart of the highly energy-efficiency solid oxide fuel cell (SOFC) power system. We plan to further progress our SOFC technology to develop unique products.
ー Do you have any plans in collaborating for global production and sales networks?
Fure：In 2019, the Kyocera Group acquired two new companies in Europe that produce unique fine ceramics products which have only been marketed within Europe in the past. Going forward, we are considering expanding these businesses outside Europe using Kyocera’s global sales networks. In addition, we will also address marketing issues to expand our market share in organic packages, a business line where our share is much smaller compared to ceramic packages, in which we already have the world’s leading share supported by solid global sales networks. To this end, we are promoting information sharing and collaboration within the segment to increase the number of orders received.
ー Would you describe the vision of the Core Components Business Segment?
Fure：The segment’s vision is to “realize the Kyocera management rationale by providing core products for a sustainable society and the creation of a healthy and fulfilling life.” According to this statement, we are endeavoring to contribute to the development of society through all our businesses, including SOFC, those related to de-carbonization and energy solutions, jewelry processing to provide recrystallized gems as a substitute for natural mined stones, and medical devices for a healthy life. All these activities aim to “provide opportunities for the material and intellectual growth of all our employees, and through our joint efforts, contribute to the advancement of society and humankind,” as stated in Kyocera’s Management Rationale. Given this objective, one of my roles is to ensure that each employee has opportunities to enjoy a sense of fulfillment in contributing to society through their work. Difficult challenges offer chances for growth. I myself faced many challenges in my career and learned to grow as a professional while striving to overcome each of them. Therefore, I’m encouraging each employee to face difficult challenges and helping them overcome these obstacles to achieve growth. I believe this will lead to the development of Kyocera and the advancement of society and humankind.