Investing in Japan
Success Stories Analog Devices K.K.
Analog Devices K.K. (ADKK) is the Japanese subsidiary of Analog Devices, Inc., a US company with a high share in the global high-performance analog semiconductor market. Analog Devices K.K. has conducted an experimental study on its “Smart Agricultural System” which uses the IoT. Today, Japanese agriculture is confronting such challenges as a decrease in the workforce population. ADKK’s system is drawing attention as it has the potential to contribute to increasing production efficiency and yield. We spoke with Osamu Mawatari, President and Representative Director of ADKK, regarding their endeavors.
Analog Devices, Inc. of the United States (hereinafter, ADI) is a leading company in the high-performance analog semiconductor field that was established in 1965. Its sales for fiscal 2016 amounted to $3.4 billion. After acquiring Linear Technology in March 2017, ADI has grown into a company with sales of $5 billion, with 45 design centers worldwide, 15,000 employees and 125,000 corporate clients and supplies over 43,000 products. ADI is listed in the NASDAQ 100.
The term “semiconductor” sounds simple, but ADI offers a very broad array of semiconductor applications. For example, the end markets include the markets for industrial and measurement instruments, consumer appliances, communications devices and automotive and health care equipment. A large quantity, as well as number of types, of integrated circuits (ICs) are used in each field. Analog ICs detect analog signals in the natural world, such as sound, pressure, temperature and electric signals, and convert the aforementioned signals into digital signals. ADI has the highest level of analog IC technology in the world.
Approximately 50 years ago, in 1970, ADI founded Analog Devices K.K. as its Japanese subsidiary (hereinafter, ADKK). After setting up a company in Japan, Analog Devices gained the confidence of corporate clients, and as the Japanese semiconductor market grew, the sales of analog ICs of Analog Devices steadily increased. Analog Devices has established a solid position in the Japanese semiconductor industry due to their reputation, track record and technological strengths.
ADI bridges the analog and digital worlds
Osamu Mawatari, President and Representative Director of ADKK described the strengths of ADI, “One of our strengths is that our product lineup ranges from sensors that acquire information from the natural world to analog signal processing ICs and communication ICs for data transmission. Digital devices will be further advanced, and the Internet of Things (IoT) will spread at an exponential rate. The advance of digitization requires high-accuracy incorporation of analog information in the natural world, which is underpinned by analog ICs. Our corporate mission is to use the most advanced sensing, measurement, power management, communications and signal processing technologies to bridge the analog and digital world, with the aim of achieving innovation that can impact the world.” In recent years, ADI has focused on the IoT field and conducting experimental study on factory automation at ADI’s own factories (smart factory), and automated parking system. “Our focus is not only the development of semiconductor but also systems and solutions optimized for each market. For this purpose, cooperation with other companies, integration of technologies and expertise are necessary. Analog ICs are the key to such efforts. As our company has strengths in the analog IC technology, we can take on challenges in any field.” devices,
“Smart Agricultural System” changes Japanese agriculture
ADKK performed an experimental study on strawberry growth environment visualization using the “Smart Agricultural System” developed by the US headquarters. This experiment was conducted in Murata’s Family Farm, which is a dedicated strawberry farm in Ibaraki Prefecture. Murata’s Family Farm supplies famous fruit shops, confectionery shops and hotels with large-sized, high-quality strawberries known as “Murata Strawberries.” The cultivation of high-quality strawberries has required frequent measurement of growth environment data, such as temperature, humidity, carbon dioxide concentration and illuminance to maintain the optimum growth environment. The problem is that such frequent measurement is burdensome for farmers.
In the experiment of ADKK, multiple IoT sensor node devices were installed in the strawberry greenhouse. Determining the optimum growth environment for strawberries is a complicated matter, and this system is aimed at visualizing and continuously monitoring conditions in order to efficiently increase the yield. Conventionally, farmers visited the greenhouse whenever they had to manually perform measurement of growth environment data. Now the aforementioned measurement can be performed on a remote monitor using PCs and smart phones. As data collection is automated, the burden on farmers is significantly reduced. In view of this experimental study, further efforts for “visualization” of the growth environment, such as accumulation of data, will be continued to establish a sensor system for agricultural process automation. The high-quality agriculture of Japan, which often depended on individual farmer skills, is confronting problems such as decrease of farmer population, skill succession and lack of successors. The Smart Agricultural System is expected to increase the efficiency and yield of Japanese agriculture. The experiment was a joint project with several domestic partner companies. Analog ICs of Analog Devices were installed in the strawberry greenhouse to build an ecosystem in cooperation with its partners’ cloud systems, IoT system integrators and software.
Murata Farm Sensor node
Looking back on this experimental study, Mr. Mawatari made the following comments: “I believe that Japan’s high-quality agriculture is a very competitive industry. When foreign tourists eat Japanese fruits, they are surprised with every aspect of their quality, such as taste, texture and appearance. Tourists buy expensive fruits and take them back home. High-quality agriculture is one of the industries in which Japan can take pride in. Many farmers devote their heart and soul into producing these products 24/7, 365 days a year. Often they are in the greenhouse to collect data from early in the morning to late at night. If this series of farming processes can be visualized by IoT, high-quality products can be produced with greater precision and efficiency. The experiment has just begun, but the fact that the research has been launched on the aforementioned topic is significant.”
The experimental study was conducted after being selected by JETRO for the Subsidy Program for Global Innovation Centers. Mr. Mawatari said, “We are very thankful that the government supported this private-sector project. Obviously it was helpful from a financial perspective, but it also allowed us to build good connections with partner companies and for the project to be smoothly executed.”
Attractiveness of Japanese market and future development
From the perspective of a foreign-affiliated company that has long been doing business in Japan, Mr. Mawatari explained the attractiveness of the Japanese market: “As can be seen from the fact that Japan is home to many Nobel Prize laureates in natural science, the country always has the potential to create innovation, and is an attractive market where many creative products are made.
Cameras, gaming devices, industrial equipment for factory automation, cars and advanced medical image apparatus are just some of the many ground-breaking products that have been developed in Japan. Working together with sophisticated clients in this kind of environment is very beneficial for our company. Once a trusted relationship is built with Japanese clients, it is easy to do business with them as partners. This is also an advantage of the Japanese market, and this kind of environment is a major factor enabling performance of this project.”
He believes that business opportunities exist in “the challenges that Japan faces as a developed country.” In the future, Japan will be as a developed country facing many social challenges, such as a labor shortage due to aging of the population. However, this adversity can be turned into an opportunity to create innovation, such as the Smart Agricultural System like this project, and will be an advantage for the Japanese market. We are considering to apply examples of successful projects in Japan to China and other Asian countries. From these point of view, the Japanese market is an important business base.”
Regarding future plans for the Smart Agricultural System, Mr. Mawatari said, “We would like to conduct a second experimental study if there is an opportunity. If the second experiment is successful, we will consider application of the system to high-quality Japanese fruit other than strawberries, such as melons, peaches and mangos. In addition, we wish to implement this project in farmlands in Niigata and Fukushima and across Japan. We will use our technological strengths to contribute to the future of Japanese agriculture.”
Osamu Mawatari, President and Representative Director of Analog Devices K.K.
JETRO provided Analog Devices with various types of information for the Subsidy Program for Global Innovation Centers. Regarding this support, Mr. Mawatari said, “JETRO kindly encouraged our participation, and thanks to their support, we were able to proceed with the experimental study much faster than we could imagine. JETRO also suggested many methods for publicizing our project. In the future, we hope to be able to count on support in forms other than subsidies in the process of our company’s growth.”
(July 2017 interview)
|1965||Founding of Analog Devices, Inc. in the United States|
|1970||Founding of Analog Devices K.K.|
|1979||Listed in NY Stock Exchange (NYSE)|
|2012||Listed in the NASDAQ market (from NYSE)|
|March 2017||Acquired Linear Technology, a world-class power supply analog IC company|
Analog Devices K.K.
|Business Activities||Market research, product development assistance and sales of high-performance semiconductors|
|Parent company||Analog Devices, Inc. (United States)|
|Address||10F, New Pier Takeshiba South Tower Building, 1-16-1, Kaigan, Minato-ku, Tokyo, 105-6891, Japan|
- Selected for the “Subsidy Program for Global Innovation Centers” by JETRO