Aiming to capture India’s growing semiconductor market, Daiichi Jitsugyo India (DJK) focuses on minimal maintenance revenue and expanding after-sales support. DJK’s Shigenori Yuki, RS Gupta and Sourav Saha unveiled the company’s global business plans to EFY’s Yashasvini Razdan at SEMICON India 2024.
Q. Where are your target markets located across the globe?
A. We have a prominent semiconductor presence globally, especially in Malaysia, Singapore, Mexico and Japan. Our major installations in the Asian region are in Singapore, Thailand, Malaysia, Indonesia, Philippines and, of course, India. Due to government initiatives, the maximum development and focus is on the Southeast Asian region.
Q. What does India’s SMT market look like for DJK?
A. The Indian surface-mount technology (SMT) market has expanded significantly over the past few years. Before 2018 and 2019, the market size was around 190 billion JPY (Japanese yen). However, during the COVID-19 pandemic, it contracted. In 2022, the market started growing again, and now India accounts for 10–15 per cent of the global SMT market, whereas previously it only represented three to five per cent. Currently, DJK’s Indian SMT market share is just two to three per cent of our global business. We see the need to catch up with this expanding market and grow our business accordingly.
Companies such as Dixon and Tata are scaling up to meet the demand for mobile phone manufacturing. We anticipate a similar trend for laptops with the production-linked incentive (PLI) scheme for IT hardware. While the semiconductor industry is still in its early stages, we expect it to grow rapidly in the next three to four years, similar to the semiconductor boom in Malaysia. This growth will further boost India’s electronics manufacturing ecosystem and propel us to expand our business in the subcontinent.
Q. What kind of after-sales support does DJK offer to its customers?
A. DJK, as a total solution provider, offers extensive after-sales support through various divisions in India. We can handle everything from greenfield projects, including interior and clean room requirements, to full facility support. On the electronics side, we do not just supply machines; we also provide comprehensive training, installation and commissioning support. Our service team offers ongoing support throughout the machine’s entire lifetime. With our partners in India, we ensure continuous assistance and maintenance, ensuring the machine serves the customer effectively throughout its life cycle.
Q. Is maintenance a revenue model for you?
A. As of now, no. Because of our main sales pitch, revenue from service is almost zero, as there are few consumable parts or components that require frequent replacement. However, maintenance is becoming a potential parallel revenue stream for us with the increasing number of installations.
We are investing heavily in training our engineers to prepare for a large-scale maintenance setup. We have a global team that supports customers with process improvements. We can bring in engineers from our Asia or Japan teams to conduct studies at customer sites and offer value beyond machinery, including process optimisation and enhancements.
Q. How do regulatory differences for machines across various markets impact distribution?
A. When it comes to machine certification, the regulatory requirements differ in markets like Japan, Europe and the US compared to India. Globally, customers often demand certifications such as UL (Underwriters Laboratories) and SEMI (for semiconductor space) for machines being sold in Japan, Europe or the US. However, in many cases, the Indian government or industry does not mandate these certifications. As a result, manufacturers tend to build machines without UL certification when supplying to India, which keeps costs lower. However, for markets that require certification, the necessary approvals are obtained before machines are supplied.
In the semiconductor sector, a similar scenario applies. While standard machines are supplied globally, certain companies, especially original design manufacturers (ODMs) and integrated device manufacturers (IDMs), may require specific certifications, such as SEMI certification. When this is requested, the certification process is initiated, and inspections are carried out by the relevant bodies, with the associated costs borne by the customer.
We address these regulatory differences by remaining flexible, offering machines with or without certification depending on the specific requirements of the market or customer. This approach allows us to meet the varying regulatory demands while keeping cost variations in mind, ensuring that we can cater to both price-sensitive and compliance-driven markets.
Q. What kind of certifications does the Indian market require?
A. The major shift we are seeing now with regulations is the BIS (Bureau of Indian Standards). The Government of India is introducing checkpoints to prevent indiscriminate dumping of products into the Indian market while also supporting local manufacturing as part of its broader initiative. This has presented some challenges for us, as certain products previously free to import are now subject to BIS approval.
To address this, we have started educating our logistics team and enhancing our capabilities to stay informed about such regulatory changes well in advance. This helps us avoid unexpected surprises when importing equipment for our customers. Overall, we view this as a positive step for India’s manufacturing sector. While there may be initial hiccups, these regulations ultimately contribute to the greater good of the country, and we have not faced any major challenges till now.
Q. When catering to different segments in India, what kind of partnerships would you like to develop so that you can provide better services to your customers?
A. DJK covers a broad spectrum in the electronics vertical, including PCB assembly, testing and inspection, with the recent addition of the semiconductor segment. When it comes to forming partnerships, we consider both local and global customer requirements. Some customers require highly technical machines, while others, especially Indian customers, may seek more cost-effective options due to the price-sensitive nature of the market. We have various partners to fine-tune our solutions to cater to specific customer requirements constantly.
We are actively working with partners in Japan, Singapore, Malaysia and India to fine-tune our offerings in the semiconductor space. We have also begun partnerships with suppliers in Taiwan and Korea while continuing to strengthen our relationships in Japan. Our goal is to cater to the upcoming Semicon OSAT (Outsourced Semiconductor Assembly and Testing) or ATMP (assembly, testing, marking, and packaging) customers in India, many of whom have been approved by the government or are in the pipeline for approval.
Q. Could you elaborate on your strategy for the Indian government’s plans to build a semiconductor ecosystem in India?
A. The Indian government has appointed ISM (India Semiconductor Mission) as the nodal agency to support the growth of the semiconductor ecosystem. While DJK has not had a significant presence in the semiconductor business in India so far, we are now actively entering this space. Though setting up fabs in India will take some time, we are already working with key customers in advanced ATMP, preparing to play a pivotal role as the sector grows.
Q. In a field requiring knowledge of multidisciplinary engineering streams, how do you address the talent requirement in India?
A. In the last decade, Noida has emerged as a hub for mobile phone manufacturing, while Manesar and the Gurugram region have long been hubs for the automotive sector. To address the industry’s growing demand for skilled professionals, we have strategically placed our training and demo centres in Noida, Sector 67. This facility allows us to train customers, operators and engineers without disrupting their daily operations.
We encourage customers to send their engineers and operators to our centre, where we provide both technical and practical training on our machinery. We also conduct on-site hand-holding for new customers after machine installation, which is crucial in today’s context. Many customers are investing in electronics manufacturing for the first time, transitioning from trading into manufacturing, and they often lack knowledge in this area. Therefore, our specialised engineering team is well-equipped to provide the necessary training and support to help them succeed.
Q. Do you engage in knowledge and technology transfer initiatives between Japan and India?
A. We operate with multi-level support teams. At the global level, we have a team focused on improving processes and providing KPIs (key performance indicators) to customers based on their requirements rather than handling day-to-day maintenance. Regionally, teams across Asia support a second level of operations. In India, we have a dedicated local team that works closely with partners, leveraging their resources when additional expertise is needed. We actively facilitate knowledge transfer initiatives between Japan and India through valued partnerships with major Japanese product companies such as Panasonic. Our team of skilled engineers in Southeast Asia collaborates closely with their Indian counterparts, sharing expertise and fostering technical excellence as part of these initiatives. All our knowledge-sharing flows from the top down, allowing us to support mega customers like Samsung with machine downtime solutions and improved processes.