Commercialisation of PIM products and orders for high-value-added applications

「In this business, orders from major customers for our core automotive turbo components, ceramic components for CMOS sensors, and other high-performance components for industrial equipment, including linear-motion bearing and ball-screw components, remained firm throughout the consolidated fiscal year, resulting in record-high net sales.」

「当連結会計年度においては自動車用ターボ部品及び高機能部品についても販売は順調に推移しました。」

「By product, mass production of automotive turbo components got into full swing and continued to drive overall PIM business revenue. Steady demand also continued for high-performance components, including linear-motion bearings, ball-screw components, and ceramic components for CMOS sensors.」

「In this business, recovery progressed from the decline in orders for automotive turbo components caused by product specification changes that had continued from the previous fiscal year. Mass-production shipments resumed during the six-month consolidated period, and from the third quarter onward we developed a system geared toward full production. As a result, sales of these products increased significantly, up 45.4% year on year, driving revenue in the PIM business.」

「Sales volumes increased, making a significant contribution to revenue growth, particularly due to the resumption of mass-production shipments of automotive turbo components and the expansion of product types ordered for high-performance components for industrial equipment. As a result, revenue for the six-month consolidated period was ¥116 million, up 63.2% year on year, and the operating loss was ¥64 million, compared with an operating loss of ¥39 million in the same period of the previous year.」

「Supply of the 5 automotive turbo component items resumed during the first quarter of the consolidated fiscal period, but orders declined from the second quarter onward as the project entered a preparation period associated with product specification changes, and shipment volumes fell substantially below the initial plan.」

「Supply of the 5 automotive turbo component items resumed during the first quarter of the consolidated fiscal period, but orders continued to decline from the second quarter as the project entered a preparation period associated with product specification changes. Orders for high-performance components, including ceramic components for CMOS sensors and components for ball screws, remained sluggish due to lower demand for semiconductor manufacturing equipment and other products, resulting in lower revenue. As a result, revenue for the nine-month period ended in the third quarter of the current consolidated fiscal year was ¥98 million, down 18.8% year on year, and the business posted an operating loss of ¥73 million, compared with operating income of ¥27 million in the same period of the previous year.」

「In this business, supply of 5 automotive turbo component items resumed during the first quarter of the consolidated cumulative period, but orders became intermittent during the second quarter of the consolidated fiscal period as the project entered a preparation period for product specification changes. Orders for high-performance components, including ceramic components for CMOS sensors and components for ball screws, also continued to trend downward, resulting in lower revenue.」

「In this business, supply of 5 automotive turbo component items had been temporarily halted due to various issues attributable to business partners and inventory adjustments associated with the switch to our products, but resumed during the first quarter of the consolidated cumulative period.」

「Shipments of mass-produced automotive turbo components resumed in August 2022, but orders were temporarily halted due to various issues attributable to business partners and inventory adjustments associated with the switch to our products. Shipments are expected to resume from June 2023.」

「Shipments of mass-produced automotive turbo components resumed in August, but orders were temporarily halted due to various issues attributable to business partners and inventory adjustments associated with the switch to our products. Shipments are expected to resume from the fourth quarter of the consolidated fiscal year.」

「Shipments of mass-produced automotive turbo components began in May. Orders were temporarily halted due to inventory adjustments associated with the switch to our products and various issues attributable to business partners, but shipments are expected to resume in the latter half of the third quarter of the consolidated fiscal year.」

「We will progressively expand mass production of 5 standard mass-produced components, totaling 15 part numbers, for 4 major companies, including IHI Corporation and THK CO.,LTD. Mass-produced items have now expanded to 35 part numbers, including the 15 items noted above.」

「During the consolidated fiscal year, we began mass production of 5 automotive turbo component part numbers in December 2021. In addition, driven by the recovery of the Chinese economy, which recovered ahead of the rest of the world, sales of high-performance components such as linear-motion bearings and ceramic CMOS sensors increased, resulting in record-high net sales and operating income since the company's founding.」

「Mass production of 5 automotive turbo component part numbers for IHI Corporation began in December 2021. We are now ramping up mass production of the initial deliveries and safety stock. We will continue strengthening our production capabilities by applying the advanced manufacturing expertise developed in our high-function components business, establishing a mass-production system offering stable quality and high yields, and reinforcing our workforce.」

「We had been preparing for the agreed October 2021 start of mass production with IHI Corporation, but production is expected to be delayed due to delayed start-up of some equipment and repeated postponements of the entry into Japan of foreign technical intern trainees amid the COVID-19 pandemic. The automaker's final test, the high-temperature durability test, has also been delayed by 2 months due to the pandemic and is expected to be completed at the end of October. We will promptly resolve these issues and implement recovery measures.」

「Toward the start of mass production in October 2021 agreed with IHI Corporation, the launch of the production molds and production equipment already ordered is largely complete. We will continue working to establish stable mass-production technology and advance PPAP (Production Part Approval Process) approval activities as needed.」

「Regarding the prototype event for diesel VG turbo components targeted for mass production in October 2021, the components passed the final test, a high-temperature durability test, conducted by the major domestic turbo manufacturer that is our customer, and were scheduled to move on to the automaker's final approval testing. However, we have been informed that the start of the planned testing will be delayed due to the resurgence of COVID-19.」

「Regarding the prototype event for diesel VG turbo components targeting mass production in October 2021, performance evaluation testing, which had been delayed due to the novel coronavirus, made significant progress during the quarter. The components passed the final test by the customer, a major domestic turbocharger manufacturer, namely the high-temperature durability test, and will now proceed to the automaker's final approval testing, which will take 2 months. Accordingly, acceptance of the prototype moulds and related costs was completed and the revenue was recognised during the quarter. At the same time, we formally received instructions to order the production moulds and production equipment required one year before the start of mass production, and began ordering new equipment required for mass production. Going forward, after passing the automaker's final evaluation testing scheduled for completion during the fourth quarter of the consolidated fiscal year, we will accelerate completion of the PPAP (Production Part Approval Process) in parallel with preparations for the main audit scheduled for May 2021.」

「All prototype components for final approval were submitted by the end of June, 4 months behind schedule. All 5 part numbers passed dimensional requirements, and some performance evaluations were also completed. We will now proceed to final implementation testing by the customer, namely high-temperature durability testing. We will devote more people, equipment, and funds, the management resources of the PIM business, than ever before to this prototype event, steadily clear the key milestones toward mass production despite the continuing effects of the novel coronavirus, and work diligently toward a mass-production start in mid-2021.」

「From the third quarter of the consolidated fiscal year onward, we concentrated the PIM business's management resources, namely people, equipment, and funds, on these prototype events. However, plans scheduled with the relevant departments of our customers, automakers and turbocharger manufacturers, have been delayed by the novel coronavirus. The overall schedule for these prototype events is expected to be delayed by at least six months, and we are considering a review of the new five-year plan, NP5Y-Challenge50, including rescheduling the mass-production start date.」

「In addition to winning formal prototype orders for 5 part numbers across 2 vehicle models, projects to switch existing products to our products based on VA (value analysis aimed at improving productivity) proposals that would reduce costs are also under way. We are currently concentrating all resources of the PIM division on these prototype events, the standard process used by automakers before beginning mass production, and are temporarily restricting order-taking activities for the high-performance components described above.」

「Having successfully established dislocation-strengthening technology for PIM products capable of withstanding operating temperatures of 1,000°C, we are focusing on commercialising components for next-generation gasoline turbos using the VG system, which are expected to become widespread from 2022 onward. During the first quarter of the consolidated cumulative period, we signed an MOU with a major turbocharger manufacturer for the mass production of several components, including nozzle vanes for current diesel-turbo engines, and began prototype events targeting mass production during the fiscal year ending March 2021.」

「We also signed an MOU with a major turbocharger manufacturer concerning the mass production of several components, including nozzle vanes for current diesel-turbo engines. The agreement is based on mass production one year later. We plan to move successively into prototyping, approval, and mass-production preparations.」

「It was a year of significant progress for nozzle vanes for gasoline VG turbos. We succeeded in using dislocation strengthening for nickel-based superalloys such as Inconel 713C, which can withstand temperatures around 1,000°C required for gasoline-turbo nozzle vanes. Because our PIM process offers overwhelming advantages in cost and flexibility in material selection, significant prospects have opened up in the next-generation gasoline-turbo vehicle business.」

「As a result, we formally received orders for 7 items of stainless-steel linear-motion bearing components, including LM guides for THK Corporation, which are in tight supply worldwide, and began full-scale production. In materials sales, we also began mass production of titanium-alloy material used to manufacture sintered components for wearable devices.」

「We formally received orders for 5 items of linear-motion bearing components in tight supply worldwide, including LM guides for THK Corporation, and began production. In materials sales, we also won an order from a major customer for titanium-alloy material used to manufacture sintered components for wearable devices.」

「From the third quarter of the consolidated fiscal year, we began preparations to launch full-scale mass production of PIM products and materials.」

「During the fourth quarter of the consolidated fiscal year, we formally received an order from a major domestic automaker for prototype moulds and met the requirements for bending strength of 700 MPa and thermal conductivity of 70 W/mK, compared with 30 W/mK for conventional silicon nitride. We will accelerate prototyping and development toward adoption in new vehicle models from 2021 onward.」

「During the fourth quarter of the consolidated fiscal year, prototyping of the nickel-based superalloy nozzle vane was completed. Going forward, we will commission an external specialist organisation designated by the turbocharger manufacturer to conduct strength testing at around 1,000°C.」

「During the third quarter of the consolidated fiscal year, in preparation for mass production of nozzle vanes for next-generation gasoline-turbo engines, we passed a potential audit under VDA 6.3, the German automotive standard, conducted by a major domestic turbocharger manufacturer, and were certified as a fully approved supplier candidate. Going forward, we will establish mass-production technology and build a robust quality-control system for prototyping of specific projects and process audits.」

「Having completed the establishment of an in-house secondary-processing technology for sintered bodies finished to a near-net shape using our PIM process, we completed the audit for the first supplier certification under the German automotive standard VDA 6.3. Going forward, we will work to establish mass-production technology and build a robust quality-control system for prototyping and final review.」

「In this context, we proceeded toward signing an MOU (Memorandum of Understanding) with a turbo-unit manufacturing and sales company whose main customer is the world's largest turbocharger manufacturer, concerning the supply of several turbo components, including nozzle vanes. A mass-production project for next-generation gasoline-turbo vehicles is also under way with Japan's largest turbocharger manufacturer, and we will further strengthen our internal organisation toward commercialisation.」

「A major advance was made with the HK30 heat-resistant stainless steel alloy nozzle vane for a VG (Variable Geometry) turbo for diesel engines. After meeting all dimensional, mechanical-strength, and high-temperature performance requirements, we began negotiations with 1 major overseas turbocharger manufacturer and 2 major domestic manufacturers on specific volumes, prices, and the SOP (Start of Production) timing, and began detailed consideration of mass production in the short to medium term through 2020.」

「For the current heat-resistant stainless-steel-alloy nozzle vane of a VG (Variable Geometry) turbo for diesel engines, we completed submission of the first product sample in December 2016 based on drawings specified by a major turbocharger manufacturer, and passed dimensional, hardness, and some high-temperature performance requirements. We will now proceed to the remaining high-temperature performance tests, which will take several months.」

「We received orders from 1 domestic automaker and 3 major turbocharger manufacturers in Japan and overseas for prototypes of 3 components for gasoline-vehicle turbochargers and 2 components for diesel-vehicle turbochargers.」

「We decided to curb sales of the binder used as a PIM material, despite its steady sales to date. We placed a reserved order for the manufacture of nozzle-vane moulds for a major turbocharger manufacturer and for evaluation testing, which will take six months and is scheduled to be completed at the end of March 2017. We also successfully developed a prototype wastegate valve made from a nickel-based superalloy rather than the conventional stainless steel, as a heat-resistant exhaust-system component. This was the industry's first such product using the PIM process and a nickel-based superalloy, according to our research. We completed shipment of the first prototype to a major automaker.」

「Going forward, toward the full-scale commercialisation of product sales, we will work to win orders for high-value-added products, including ceramic ball bearings, automotive component 1 (heat sinks for power devices), automotive component 2 (turbo-related components), camera components, and ceramic components for fishing equipment.」