Yokogawa Electric, one of Japan’s excellent manufacturers of control equipment, decided to discontinue building inspection equipment for semiconductor production in March 2013 and concentrate its management resources on equipment for plant control. After spinning off its semiconductor inspection business in April 2011, the company has been looking for a buyer unsuccessfully. The plant current building inspection equipment will be remodeled as a plant exclusively for the production of plant control equipment.
The company used to be one of the world’s three big names in the semiconductor inspection equipment business with Advantest and Teledyne of the U.S., and it enjoyed big business with Samsung Electronics of Korea. It achieved sales of 20 billion yen in the semiconductor inspection equipment business in 2010. However, its share fell about 2% lately due to a lack of investment in development. In fact, the business has been in red since 2007. While Yokogawa’s presence in the market dwindles, Advantest acquired Verigy of the U.S. in 2011 to strengthen its ability to provide integrated services. And Yokogawa further decreased its share because its equipment is designed only for a specific process.
As Peter Drucker said, innovation and marketing are the two most critical factors for a company. Stay alert anytime. If you drop your guard, you will lose. Think about Nokia and Research in Motion (RIM), both of whom have hard time to regain their golden age.