From Vacuum Fluorescent Displays (VFD) to cutting-edge LCD Touch Screen Modules, how Noritake Itron stands out amidst industry competition in the next generation of Human Machine Interface (HMI) displays
What is the main business of Noritake Itron and what are some of your company’s core strengths? How is Noritake Itron able to stand out among your competitors in the field of Human Machine Interface (HMI) displays, and what are some of the key milestones that have come to define Noritake Itron?
Dr. Nakamura is the founding father of our company, and the company has switched from generation to generation in terms of the products we have. Should you see the products we offer, you will see a difference from generation to generation. Take for example our Vacuum Fluorescent Displays (VFD) time gauges, although there is a difference, you can also see a form of preservation for the shape of the product. Big changes have come with the display, and obviously, over time things such as colour or graphic displays have become prevalent. Additionally, back in the day, we were only able to display single digits, but that was quickly expanded to nine digits in response to demands from the calculator market. From there we were able to expand and display custom graphic characters for home appliance or office automation instrument markets in a similar way to calculators. A lot of those custom graphics came at the request of customers who envisioned something specific in mind when they ordered from our company. Over time displays have become wider, and so displays can be huge, such as the ones we have installed in public information displays.
Noritake Itron is known for its LCD Touch Screen Modules as well as VFDs that are used throughout many production sites. We have a variety of different sizes including 4.3-inch, 5.0-inch, and 7-inch displays as well as bigger TFT displays such as 10.1-inch. Customers can take those products and suggest modifications to us and we are happy to comply with their requests. Data input is the customer’s domain, but we want to be the type of company that meets all of their needs so that data input and display is as seamless a process as possible. We enable those customers to communicate in the best way possible, no matter the information they want to communicate. Noritake Itron has always retained the pioneering spirit of Dr. Nakamura, and to this day we still try to challenge ourselves with new technologies and new techniques so that we can push ahead and overcome those challenges.
Japanese manufacturing is at a very exciting time, and over the past three years, we have seen large supply chain disruptions due to the COVID-19 pandemic as well as the US-China decoupling. As a result of this, many corporate groups are looking to diversify suppliers for reliability. Japanese firms are known for their reliability and advanced technology, and thus are in an interesting position due to the weakened JPY, with observers believing this is a very unique opportunity. Do you agree with this sentiment, and what are some of the advantages Japanese companies have in this current macroeconomic environment?
Yes, Noritake Itron has seen some pretty bad outcomes from the trade war between the US and China, and back in the day we had some issues with supply chain disruptions causing some negative effects on our business. Still, now we are trying to recover and we are still suffering because of that situation. We did not expect that the decoupling of the US and China would be so prolonged, and we have yet to see an ultimate answer to that situation as a whole. We as a company are dependent on some supplies coming from China and we are still being affected by the supply chain disruptions you mentioned.
Speaking of the recent JPY depreciation, of course, this is the lowest point in several decades and we see this as a business opportunity. Local manufacturing in Japan is now attractive again, and companies like our own are trying to make the best of this situation and promote Japanese-made products abroad. Overall, we are analyzing the tendencies of the market and trying to come up with actions that best take advantage from a global perspective.
A challenge facing Japan right now is its demographic situation. It is the oldest society in the world and has a shrinking demographic line. We are seeing effects such as a labor crisis and a shrinking domestic market. What are some of the challenges this demographic shift is presenting to Noritake Itron and how have you been reacting to them?
Being a local company, we see this as a big challenge, especially here in Mie prefecture. We feel the labor shortage and it is presenting us with challenges to recruit new personnel year-to-year. We see this as a result of the average age of employees rising, and to be completely honest, the numbers speak for themselves.
Another problem that rises from this situation is the question of how you pass technology and expertise to the next generation. There is a lot of know-how and knowledge that has been accumulated by our engineers, and to evolve we need to find a way for those engineers to pass on their expertise. Job rotation is one solution we developed many years ago now, and it means that one employee shuffles from position to position, and it allows those employees to develop a wide range of skills. They can get the best features from different departments and grow within the company structure. In my mind, this is increasing the knowledge and productivity of personnel, allowing them to grow and evolve. It also creates a situation where personnel are interchangeable, and we are not reliant on a single engineer.
Noritake Itron has historically been known to specialize in VFD, a technology that has been around for several decades now and is less commonly used in consumer electronics because of the rise in LCD and OLED displays. VFDs however continue to be used in specific applications such as certain industrial equipment. What advantages do VFDs have when compared to newer forms of display technologies?
As you mentioned, VFDs have been gradually replaced by these newer technologies, however, this is not new to us. When VFD technologies came to life 50-60 years ago, we already saw that newer technologies might come and threaten their usage. In many ways, we try to adapt to our customer’s portfolios, working not only on a B2B basis but sometimes B2C. The industrial field is where VFDs shine, and in many ways, the technology is beneficial in this use case.
The number one advantage that comes to my head is the wider temperature operational features covering between -40 degrees C and +85 degrees C. Companies can install VFDs in their products which are placed and operated in very harsh temperature environments, and this is crucial when you talk about the industrial sector.
Additionally, in these industrial sectors, VFDs can be life savers. When you are dealing with high-precision, you need high-accuracy data to be displayed so that all can see. VFDs allow the viewing of data from a wider angle, which is a big advantage when compared to LCDs. To summarize, it is the robustness as well as the visibility of characters or graphics that allows VFDs to push ahead in certain fields and applications.
Two recent trends we are seeing in industrial sectors are miniaturization and dust-proofing. How is Noritake Itron reacting to these trends when it comes to screens for industrial purposes? What trends are driving product development at your firm?
Our company is analyzing what our customers want and what can be good for their businesses in terms of these recent trends. Our R&D can be enhanced with this understanding. Our products are widely used in the medical field for analytical equipment as well as for POS (Point-of-Sale) systems. Those fields require excellent legibility or readability of characters to display devices to prevent users from mistakes. Our products tend to be used more in functional sites rather than clean-room-like environments, and there is a wide range of temperatures that our products can operate in. That is why we can ensure that our displays work effectively no matter how hot or cold the location is. LCDs are known to malfunction in certain temperatures, however, our products will not. With this in mind, we need to talk to our customers and understand their usage needs. From that information, we can then drive our R&D processes to come up with a product that meets their specifications.
Is there a specific field that you are currently focusing on or one that you would like to introduce your products into?
The environmental industry is somewhat of a hot trend right now. We would like to retain our presence in the medical field as well as POS systems, but at the same time, we are thinking about renewable energy sources, solar panels, and energy storage systems. There is wide adoption of displays in these kinds of industries, for example, on EV chargers. We believe that our VFD technology could be handy with these kinds of displays.
Here in Japan, there is a huge push towards semiconductor production domestically; for example, Sony and TSMC are building a brand new fabrication plant in Kumamoto. What opportunities do these new industries present for you in terms of government backing and the new incentives on the table? Do you see new opportunities for your firm in the field of semiconductor manufacturing?
We do see this as an attractive new field for our company, however, while it is exciting, there are some problematic points to all of these new domestic semiconductor production sites. Up until last year, there was a massive chip shortage, and still, in 2023, the industry has not fully recovered.
Despite this, we are looking forward to using new technologies in the evolution of semiconductors, and 2nm processes have flipped the industry on its head. We are quite different in that sense because we are still utilizing a lot of legacy chips. That may end up becoming an issue for us, as we now face the question of how we are going to change the chips that we have been using for many years now. It might be difficult purely because we are a small company, and even large companies struggle with this shift. If we can overcome these issues, however, we will look to find opportunities in these new industries.
Another issue we are tackling right now is the question of how we preserve good connections with our customers. As you can imagine, semiconductors will gradually be replaced with new technologies; chips with much more capacity, and obviously we are going to need to make that transition at some point in time. We will have to introduce new products with new chips, but then we will have the challenge of preserving those customers with old types of chips. We want those customers to be repeat customers, and we want to value them so that they do not procure products from another company. It is important to keep the promises we make to our customers and to provide older, legacy chips, even as newer chips and technologies are introduced.
What role do partnerships play in your business model and are you currently looking for any partnerships in overseas markets?
Yes, we have been thinking about partnerships with foreign companies, but up until now, we have tended to do things by ourselves. There has not been a necessity to use other companies’ technology until now, but in the future, we do believe it is possible. Unfortunately, it is something we cannot exactly discuss right now.
As an engineering company, we tend to do things our way, and we have a lot of technical expertise inside the company. Employees have the technical skills to make introducing our products possible and it speaks to their engineering spirit. Challenging new opportunities is something that we like to do here at Noritake Itron and we are pursuing new customers and new hurdles.
Your firm is part of the wider Noritake Group, which merged with the Group in 2002. Could you elaborate more on the synergies you can leverage as part of the Noritake Group?
The biggest advantage we have seen in the group is the ability to penetrate overseas markets, and we have been tackling other countries since the 1970s. Being in a group has allowed us to use the human capital in the group and be more proactive in our sales activities in foreign markets.
Could you elaborate on any countries or regions you have identified for corporate growth and what strategies will you employ to do so?
Our sales offices are in Chicago in the United States, in Frankfurt in Germany as well as in the UK. Each location understands the local needs of the market. It creates a win-win situation for us because as a Japanese company, we can get information from our overseas locations and then introduce our products as and when needed. The UK is good at software, and Japan is good at hardware, so we can utilize the software developed in the UK with the hardware developed in Japan together. Again, this is another synergy of the group company structure, and we can gather together to create great synergies. Mutual brainstorming is very beneficial in this regard.
In regards to new penetrations, India and Southeast Asia are targets right now, however, we do not have sales offices there yet. Despite that, because of the population issues in Japan as well as the rising population of Southeast Asia, it is something that is in our minds. The Indian market is seen as attractive right now for several Japanese firms. We would like to start these activities there through a distribution deal, allowing a distributor to sell our products in this market.
Is there a particular product that you believe applies to that market?
One particular product that comes to mind is the control panel in equipment in public services such as railways. I am talking about ticketing machines or ticket gates. The display on those control panels was introduced by us and this particular product has been done in other regions up until now. I think because of our long and successful experiences in those fields we can provide with customers precise and appropriate support as well as products.
Imagine that we come back in three years and have this interview all over again: What goals would you like to have achieved by then?
I would like to see my firm continue to stand firmly with our core VFD technology. This is still our core business in many ways and we are dependent on this segment. However, I would like to then establish two more pillars for our company. TFT is another technology that the company would like to introduce further because we see a lot of potential in this sector. Additionally, I would like to continue introducing our multi-functional display products, and these kinds of products are seeing a healthy amount of traction in industrial uses. DX within Japan requires the use of this kind of technology, so we would like to see our growth in this sector.
Interview conducted by Karune Walker & Paul Mannion
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