of customer-first ー Attitude since the company's founding ー
Before establishing Tokyo Electron (TEL), its founders, Tokuo Kubo and Toshio Kodaka, had worked for general trading companies, importing and selling semiconductor manufacturing equipment. This was equipment for producing diodes and transistors, prior to the commercialization of integrated circuits (ICs). The field of electronics is based on high level technology with advancements taking place constantly. Consequently, technical after-sales service is important. However, Kubo and Kodaka did not feel they were able to provide a sufficient degree of service.
They supplied Japanese electronics manufacturers with American-made equipment, but in those days, there were few staff with a deep enough technical understanding to be able to provide assembly support. In addition, it commonly took up to a month to gain the import permission needed to order parts. Before selling equipment, they felt that it was important to have spare parts and demonstration models on hand, and for the staff responsible to have mastered its operation. For these reasons, they founded Tokyo Electron (TEL) in 1963, with the aim to create a company focused on technology and service.
Their approach gained the trust of the American manufacturers, forming the basis for securing agency contracts and to establish joint ventures, leading to expansion of the business. The attitude at that time is reflected in TEL’s Corporate Philosophy, “We strive to contribute to the development of a dream-inspiring society through our leading-edge technologies and reliable service and support.”
- Tokyo Electron Laboratories, Inc. is established
- TEL begins import and sale of diffusion furnaces manufactured by Thermco Products Corp. (U.S.)
- Concludes an agency agreement with Fairchild Semiconductor Corp. (U.S.) for IC testers
- Begins importing and selling IC testers
- Pan Electron Inc. is established and becomes Japan's first IC stocking distributor
- Joint venture TEL-Thermco Engineering Co., Ltd., is established with Thermco Products Corp. (U.S.), and begins domestic production of diffusion furnaces
- Teltron Co., Ltd. is established and begins car stereo OEM export sales
- TEL-Thermco Engineering Co., Ltd. offices are relocated to Yokohama, and complete domestic production of diffusion furnaces is implemented
The next few years saw Japanese businesses suffer trade deficits, with the Nixon Shock in 1971 followed by the Oil Crisis in 1973. TEL was also affected, experiencing a significant fall in profits. TEL’s net sales at that time were approximately 20 billion yen, of which some 60% were generated in the export divisions, with the remainder attributable to imports. However, in terms of profit, exports saw approximately 300 million yen loss. Consequently, TEL made the decision to withdraw from its business exporting consumer electronics such as car radios and calculators. In spite of the losses, it involved shutting down operations that accounted for 60% of net sales.
It was a bold decision, taken in an effort to restore the business to a sound revenue structure.
In fact, facing such crises provided the opportunity to restructure the business to produce more stable profit. The company set forth a product strategy from a long-term perspective, continuing to tackle cutting-edge technology, in fields where other companies could not easily compete, as well as expanding its specialized business in growth-potential fields such as semiconductor production equipment and computer-related devices. This policy, which is maintained to this day, is one of the reasons why TEL continues to deliver its high value-added products around the world.
- Subsidiary MEC Engineering Inc. begins line printer sales
- Tokyo Process Development Inc. is established and begins import and sales of analytical equipment (for pollution prevention)
Subsidiary Pan Electron Inc. begins import and sales of microprocessors as an agent of Intel Corp.
TEL America, Inc. is established
- Agency agreement concluded with Computervision Inc. (U.S.) and import of CAD/CAM systems begun
Yamanashi office opens
European office established
- Withdraws from production and export of consumer electronic goods such as car radios and calculators, despite it comprising some 60% of net sales at the time
- TEL-Thermco Engineering Co., Ltd. develops the world's first high-pressure oxidation furnace
TEL considered the import of superior technology as one form of development investment, and established a succession of joint-ventures with American equipment manufacturers. Through companies such as TEL-GenRad Ltd., TEL-Varian Ltd., and TEL-Lam Ltd., TEL provided its own brand of engineering services to meet the needs of Japanese semiconductor manufacturers.
Later, with the progressive strengthening of the Japanese yen, TEL’s U.S. counterparts decided to dissolve the joint ventures and withdraw from production activities in Japan. TEL began to independently manufacture products and provide after-sales service, based on its sense of mission in the ongoing supply of products to its customers and leveraging its accumulated technology. In this way, the company built up its Japan-wide manufacturing and sales structure.
At the core of this was the belief that, unless collaboration with overseas manufacturers is on a win-win basis, it will not survive. In making decisions, TEL adopted the perspective of medium- to long-term profit, rather than only short-term, considering whether or not something would benefit both TEL and its partners, and if it would lead to customer satisfaction. This displays TEL’s approach to fair business with its partners whereby, rather than trying to guarantee a permanent alliance contractually, it works to ensure actual mutual satisfaction.
- TEL exhibits at first SEMICON Japan event
- Tokyo Electron Laboratories, Inc. renamed Tokyo Electron Ltd.
- TEL-GenRad Ltd. established
Domestic production of in-circuit board tester
- TEL establishes Central Research Laboratory within the Yamanashi Regional Office
TEL-Varian Ltd. established, domestic production of ion implantation devices
TEL MEC, Inc. started to develop the CLEAN TRACK system
- TEL-Lam Ltd. is established, domestic production of etch systems
- Listed on the First Section of the Tokyo Stock Exchange (from the Second Section)
- Tohoku office opens
From the 1980s, growth of the computer industry and growing demand for AV devices saw continued rapid evolution of semiconductors, resulting in pursuit of the latest technology for their manufacture.
In this context, consultation between semiconductor and equipment manufacturers was essential, which was where TEL could leverage its unique business model, combining its functions as a trading company and manufacturer.
With its trading company function, TEL sought out the highest level of technology and equipment available worldwide to suit the true needs of its customers. TEL combined this with the leading-edge technology it had developed through its manufacturer function to rapidly provide unique, optimal solutions.
In this way, TEL enabled its customers to resolve concerns by incorporating external technology, acting as a partner in the discovery of new technologies.
Furthermore, TEL also endeavored to keep abreast of cutting-edge technological trends from its customers, whereby it could be the first to research and develop next-generation products.
This created a development cycle with benefits for both parties.
- Completion of Central Research Laboratory in the Hosaka Industrial Estate in Nirasaki City, Yamanashi Prefecture
Shipping of first vertical diffusion furnace manufactured by TEL-Thermco Engineering Co., Ltd.
TEL-Lam Ltd. becomes 100% subsidiary company
Export of semiconductor production equipment begins
TEL Tohoku Electronics Ltd. is established
- TEL-Thermco Engineering Co. Ltd. becomes 100% subsidiary company and changes company name to TEL Sagami Ltd.
- Shipment of "CLEAN TRACK™ MARK-V" coater/developer
World number one semiconductor production equipment manufacturer by sales (3 consecutive years to 1991)
- TEL develops and begins sales of liquid crystal displays (LCD) production equipment
- Tokyo Electron FE Korea Ltd. is established, creating a foothold to launch direct overseas sales
In the 1980s, Japan’s semiconductor industry experienced dramatic growth in the memory field, and thanks to this, TEL was able to achieve the leading sales among semiconductor production equipment manufacturers, ranking first for 3 successive years from 1989 to 1991. However, US semiconductor manufacturers shifted the focus of their business towards high value-added products such as CPUs and image processing systems for PCs. US semiconductor manufacturers, who had keenly sought Japanese cutting-edge production technology with its world-leading quality, now hoped to deal directly with TEL, which until then had supplied its goods to the US market through sales agents.
In order to achieve this, TEL faced the enormous tasks including convincing its agents and establishing local subsidiaries. But TEL decided it was necessary to respond to customers’ true needs with greater speed. Consequently, it took the bold move of establishing a direct sales structure.
TEL were starting out from scratch, but from the outset, the company held a policy of appointing leaders highly familiar with the territory and the customers, and no expense was spared in funding and effort expended to attract the best local talent.
Consequently, a succession of people joined TEL who had previously worked with the company at their overseas partners.
Later, TEL similarly established subsidiaries in other European and Asian countries, resulting in the rapid expansion of foreign sales from 30% of TEL’s business in 1994 to over 70% in 1999.
- Tokyo Electron Europe Ltd. is established, enabling TEL to build a direct sales and support structure for semiconductor production equipment in Europe
- New corporate slogan "Customer Satisfaction" established
Tokyo Electron Oregon, Inc. is established as the first overseas development and production site
- Tokyo Electron Taiwan Ltd. is established
Tokyo Electron Massachusetts, Inc. is established
Tokyo Electron Phoenix Laboratories, Inc. is established
Tokyo Electron Texas, Inc. is established
- Tokyo Electron Miyagi Ltd. is established (Matsushima Office)
- Tokyo Electron Arizona, Inc. is established
Tokyo Electron EE Ltd. is established
Tokyo Electron Israel Ltd. is established
- Attainment of 1,000 coater/developer "CLEAN TRACK™ ACT™ 8" shipped
Just when TEL had found success in the global market, it was hit with the 2001 collapse of the IT bubble, resulting in losses. TEL resolved to rebuild a strong foundation for profit and to achieve sustained growth, formulating the TEL Values, with the active participation of its employees. The company also established TEL University in order to promote employees’ self-directed career development.
Later, backed by a strong global economy, TEL recorded its highest ever profit in the fiscal year to March 2008, but the global financial crisis that followed saw sales halve. In 2013, having directly suffered the consequences of dramatic economic fluctuations, TEL announced a merger agreement with industry leader Applied Materials, Inc. However, due to differences with the US Department of Justice, talks had to be set aside. The company re-launched as New TEL, in an effort to once again become the world number 1.
The company clarified in writing what it should value in its Vision; introduced a new, fair human resource system, with accurate appraisal of employees’ accomplishments based upon their responsibilities and contributions; and promoted process integration in order to comprehensively resolve customer issues. Inspiring employees, which has been a key focus of TEL since its founding, also signifies TEL’s belief in making all stakeholders happy, which is once again central to TEL’s management.
- "TEL Value" formulated as code of conduct
- The in-house human resource development organization "TEL UNIVERSITY" is established
Ranking No.2 in the FY2007 Prism Ranking (ranking of excellent companies)
- Entry into photovoltaic (PV) production equipment business (acquisition of Swiss Oerlikon Solar)
- Tokyo Electron Miyagi Ltd. is established (Taiwa Office)
- TEL Probus-SiC™ wins grand prize at "Semiconductor of the Year 2011"
TEL named one of the World's Most Sustainable Companies (Global 100)
- Single Wafer Cleaning System, CELLESTA™ -i MD wins grand prize at "Semiconductor of the Year 2014"
- Merger agreement with Applied Materials, Inc. dissolved
Re-emergence as New TEL (Vision, Medium-term Management Plan formulated and new Corporate Logo created)
The EXIM™ Sputtering System for next-generation devices wins Award for Excellence at "Semiconductor of the Year 2015"
- TEL receives Prime Minister's Award in citation of merit for Industry-Academia-Government Collaboration (2nd time, 1st in 2003)
- Net sales exceeded 1 trillion yen in the financial year through March