Integrating with AVX to Accelerate Global Growth:
Kyocera’s Electronic Components Business Segment
Kyocera has implemented major organizational reforms to consolidate various business lines into three segments. The Electronics Components Business Segment is led by the partnership of Kyocera’s Electronic Components Group and Kyocera AVX, a U.S.-based subsidiary of the Kyocera Group. The new segment pursues synergy between both partner companies, while emphasizing the strengths of each, seeking to expand markets globally. John Sarvis and Koichi Kano, head and deputy head of the segment, respectively, shared their views on strategies for growth and teamwork across the division.
Leveraging synergies between Kyocera and KAVX to double sales and achieve a 20% profit ratio
In April 2021, Kyocera completed large-scale organizational reforms and began operating under a new corporate structure of three consolidated segments: Core Components, Electronic Components, and Solutions Businesses. The Electronic Components Business Segment consists of Kyocera and AVX Corporation (AVX), a U.S. subsidiary, which have joined together on a new corporate brand, “KYOCERA AVX.” Later, AVX changed its name to “KYOCERA AVX Components Corporation (KAVX).”
ー What are the reasons for consolidating the electronic components businesses of Kyocera and KAVX?
Kano：Kyocera manufactures and sells electronic components for information and communications markets, mainly in Japan and Asia, while KAVX is a leading global supplier of electronic components and solutions for the automobile, aviation, aerospace, and many other markets in the U.S. and Europe. Demand for electronic components is expected to grow significantly, driven by IoT, 5G, and Advanced Driver-Assistance Systems (ADAS). Within this context, we decided to make KAVX a wholly-owned subsidiary of Kyocera so we could leverage synergies to increase global market share and efficiently utilize both companies' management resources while mobilizing our respective strengths. The new segment’s foundation is supported by the strong relationship of trust forged between the two companies over the past three decades since 1990, when KAVX first joined the Kyocera Group. Over these years, the two companies have been guided by Kyocera’s philosophy, respected each other, and shared knowledge to achieve steady growth. John and I have also worked closely together and built a strong relationship since we first met in 1990.
ー Would you tell us about the partnership and specific synergies?
Sarvis：We will use our mutually complementary strengths related to markets, regions, sales channels, etc., to promote cross-selling. KAVX is utilizing its original IT system and global distributor networks stretching across the U.S. and Europe to sell products efficiently not only to major companies, but also to about 30,000 small and medium-sized companies worldwide. These strengths will help Kyocera market its electronic components in aviation, aerospace, healthcare, and other industries in the U.S. and Europe. At the same time, KAVX is planning aggressive sales of its products into the information and communications markets in Japan and Asia. In addition, we are engaged in joint product development with other Kyocera segments. One relevant partner is SLD Laser, a U.S.-based Gallium Nitride (GaN) device manufacturer that joined the Kyocera Group in 2021. We are combining Kyocera’s electronic components technologies with their GaN-based technologies to develop laser modules for EVs, such as headlamps. Our goal is to create more synergies throughout the Kyocera Group and achieve a sales target of 500 billion yen – double the current level – and a profit ratio of 20% as early as possible.
Proactive investments in high-growth products, aiming to become an industry leader
ー Could you share some details about your high-priority businesses?
Sarvis：Our high-priority products are multilayer ceramic capacitors (MLCCs), crystal devices, tantalum capacitors, among others, and we have planned aggressive investment for these products. To increase the production capacity of MLCCs, Kyocera will invest in constructing a new facility at the Kagoshima Kokubu Plant in Japan, while KAVX will expand automotive MLCCs output capacity in Thailand. Also, we will establish a new division in April 2022 to integrate our MLCC product development, manufacturing, and distribution capabilities. This will allow us to accelerate business expansion under a unified global strategy. For crystal devices, we aim to use our proprietary photolithography technology to secure our position as a market leader for micro resonators. Furthermore, we established Kyocera Tikitin Oy, a new development facility in Finland, in 2019 to meet the industry’s requirements for more compact and thinner products and are developing new products that utilize Si-MEMS and wafer-level packaging (WLP) technologies. Finally, in the tantalum capacitors business, KAVX built a new plant in Thailand in December 2021 to expand the output of polymer tantalum products, looking to solidify our position as the industry leader.
ー Would you describe the vision of the Electronic Components Segment?
Kano：Our goal is to become an industry leader, pursuing differentiation by providing “something different” from our competitors and becoming our customer’s first choice for unique products and solutions. In my view, new employees entering Kyocera in recent years are strongly attuned to contributing positively to society. As such, more people value solving issues critical to society through their work rather than focusing only on pursuing profit. My role is to recognize these diverse values and provide opportunities for everyone to perform at their full potential and achieve their personal growth. I believe this will drive the company’s growth toward our goal, and this view aligns with the Kyocera management philosophy that we have embraced since our founding in 1959. It has been over 30 years since Kyocera and KAVX first joined forces. Over this time, the two companies have built a firm relationship of trust. As a result, colleagues from that time have now become leaders in each business, and I believe these relationships will be a valuable business asset and the key to our success. We will further solidify our mutual understanding and confidence, guided by a spirit of unity, while enhancing our respective strengths to create new value.