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(Bloomberg) -- Showa Denko K.K., a key chemicals supplier to global chipmakers like Taiwan Semiconductor Manufacturing Co., is overhauling its executive team and company culture in anticipation of an industry shift it expects will boost its business over the next decade.
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New hires Hideki Somemiya and Tomomitsu Maoka joined in October and have already taken steps to shake up the century-old company. 53-year-old Somemiya, the new chief financial officer, began offloading shares in partner companies that were held merely to maintain good relations, while 47-year-old Maoka, appointed chief strategy officer this month, is revamping how the company communicates with and retains employees.
Both have a track record in the semiconductor industry: Somemiya helped Sony Group Corp. boss Kenichiro Yoshida develop recurring revenue from its chip business while Maoka helped revive the fortunes of key auto chip supplier Renesas Electronics Corp. They were handpicked hires of recently appointed President Hidehito Takahashi, who is mapping out the overall strategy. Founded in 1908, Showa Denko counts Infineon Technology AG and Toshiba Corp. among its customers alongside TSMC, according to Bloomberg supply chain data.
“When Takahashi asked me to join the company, he told me that Showa Denko is making a huge bet to change itself radically to be a true global player, and I thought that challenge exciting enough to stake my career on it,” Maoka told Bloomberg News in an interview.
The Tokyo-based company is betting on chipmakers moving their focus from shrinking semiconductors to stacking them in layers to help it reach the prodigious growth rates of equipment-making peers like Lasertec Corp. It provides essential ingredients for the treatment and preparation of silicon wafers, which would be in growing demand once miniaturization processes are exhausted and each new chip starts to consume more material.
“Demand for our polishing and packaging products will surge when chipmakers begin stacking up layers,” Somemiya said. “We’ve previously failed to position ourselves well to profit from the value we provide, but our time to reap the fruit of our work is coming.”
Showa Denko positioned itself aggressively by paying more than double its own market value for the chemicals unit of Hitachi Ltd. in 2020. The $8.8 billion deal made it a key supplier of chemical mechanical planarization slurry, a liquid used to polish the surface of silicon wafers. The company also launched an industrywide consortium to research and develop next-generation 3D packaging technology last year.