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Products to keep up with new global needs and developments
Yuichiro Naya, President and CEO of Meiko Electronics Co., Ltd.
Yuichiro Naya
President and CEO of Meiko Electronics Co., Ltd.
Meiko provides various state-of-the-art products, such as high-density and high-performance PCBs for smartphones and automobiles. President and CEO Yuichiro Naya, gives his insight into Japanese manufacturing and his company’s operations
What are the main competitive advantages of Japanese electronic manufacturing compared to its competitors China and Korea?
Seventy percent of Meiko’s sales come from the automobile and smartphone business. From a national point of view, Japanese companies have stopped manufacturing smartphones. While we do not supply Apple, we produce printed circuit boards for Samsung and Chinese smartphones.
Does that mean that Japanese companies have withdrawn from smartphones manufacturing? Well, the answer is that Japanese corporations imitated America and have switched from vertical to horizontal-type integration to design and develop their products. With their horizontal mergers, Asian companies do everything, from developing to assembling. As a result, Japanese companies have lost market share. Because we could no longer depend on Japanese smartphone manufacturers, we expanded our client portfolio to international organizations. Our car accessories are used by Toyota, Nissan, Honda, etc. and also by Volkswagen and BMW in Europe.
We also supply circuit boards for Japanese Tier 1 corporations in the US. Japanese cars are still internationally competitive, so we supply our circuit boards to the corporations present in Japan, the US and Europe. In comparison to smartphones, car accessories haven’t drastically diversified. However, with the appearance of innovative technologies such as self-driving cars, IoT and more, this will most likely change. I am worried about the ability of Japanese corporations to cope with these innovations. Japanese firms tend to think in the old fashioned way, and that method of conducting business may not be the most appropriated for future technological development.
With regards to the United States, the "America First" policies of President Donald J. Trump, wanting to bring back manufacturing to the USA, has thrown a wave of uncertainty on the world’s manufacturers. However, many international corporations see that as an advantage, as they expect an increase in demand for electronic components and manufacturing equipment. For MEIKO, do you see this as a challenge or as an opportunity?
In similar fashion to printed circuit board makers; materials, processing machines, and chemical manufacturers have disappeared from the United States. In order to produce in the United States, our products must be made starting from scratch (from raw materials) or through exports from Asia. Exporting raw materials from Asia requires processing, a difficult and time-consuming maneuver. In the past, I considered entering Mexico to offset our manufacturing production. However, the election of Donald Trump has made a relocation to Mexico difficult.
You mentioned that you were somehow frustrated with the corporate guidelines of big Japanese corporations. Could you explain to us where this frustration comes from?
Japanese corporations rarely employ a top-down management style; Japan prioritize bottom-up. An excellent example of this culture is Japan’s approach to quality. In many organizations, the quality control department is extremely strong and all it thinks about is uncompromised quality. But to remain competitive, other factors, such as cost effectiveness, must be considered. However, because the top-down management style is not practiced, adjustments between quality and cost do not work effectively, and it is the company as a whole which suffers competitively. While so far it hasn't been the case with automobiles, I am afraid that it will be in the future. Another concern of mine deals with the fact that the top leaders of Japanese corporations are rarely specialist. In the US for example, Apple’s head representative is an expert. At Meiko, we have adopted a top-down management style, so we do not have such issues.
MEIKO was founded in 1975 as Meiko Denshi Kogyo. Could you please highlight the key milestones of the company?
The first milestone occurred when we entered China in 2000, which was soon followed by our Vietnamese expansion. Truth is that the part-manufacturers who have remained in Japan only, are steadily declining. Meiko has been successful in offsetting its production capacity abroad without losing its product’s positive attributes. Throughout the years, we have uniformly kept the Meiko quality across our international factories. The reason for this success is due to "our people," our workers. In the circuit board industry, facilities and processes are highly similar to one another. Each plant has 30 to 40 Japanese staff instructing local workers, and that approach is working well. As Japanese people are not good at top-down execution, they work together with the local people in China and Vietnam. Installing a positive relationship with the local workforce is key to the success of Meiko.
The automotive industry is perhaps the sector that is currently living the most interesting changes, with connectivity and sensor technology set to create "the car of the future." As a key player in the development of the automotive industry, could you explain to us what the car of the future will look like?
The engines of automobiles are evolving, along with electric car motors and LED headlights. Nowadays, LED headlights are used in 15-20% of all cars. Since heat dissipation is important for these types of printed circuit boards, we are putting a great deal of emphasis to adjust our technology to the current demand. LED technology is progressing in Japan, and in the future, I believe that all headlights and tail lamps will be LED. The amount of substrate used for these lamps is enormous and they will require a great deal of printed circuit boards. With regards to autonomous driving, we are currently developing solutions to assist smart cameras, which detect objects, as well as radars for automatic operations. We believe autonomous driving is a field poised to grow. While Europe has acquired a head start in this field, I believe that Japan will soon catch back-up thanks to its investments.
The U.S.A. is the world’s first market for electric cars. Can you explain to us how your company helps in the development of eco-friendly alternatives?
Dealing with environmental issues will inevitably come to pass by the implementation of electric cars. In Japan, there are many PHVs that consume less gasoline, and that trend will continue to grow. It is also important to make LED lights with less energy consumption. Although these technologies do not require drastic changes in terms of circuit board production, heat dissipation will become important.
Your company is a true international player, with around 30% of sales coming from the overseas market. North America and China represent around 12% of your group’s sales, as Korea and Europe account for approximately 13% and 7%. For Meiko, which market has the highest growth potential?
In the near future, automobiles will grow more computerized, so the use of our products will naturally increase. Since IoT censors will also increase, I hope to deal with such companies. Because IoT censors are necessary for auto-driving, I believe it represents great potential for Meiko.
What are the main differences between the American and the Asian market? What is your strategy with regards to the USA? Both domestically and abroad, your company faces tough market competition, with industrial giants such as SHARP or ROHM that are also battling to create the next best seller. What are the competitive advantages of MEIKO?
Because PCB production has analogue aspects, improvement based on experience – rather than drastic changes – are necessary. Since we entered the PCB market for cars and smartphones at an early stage, we have accumulated extensive experience and know-how, allowing us to maintain superiority. Furthermore, Meiko enjoys high productivity, which allows us to produce quality products at a reasonable price. I hope to continue on providing such products in the future.
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