Staying out of PVC and the other big markets — concentrating on photoresist (1984)

The arithmetic of the side that chose to be small

What Tokyo Ohka narrowed in on was not a market it could win but a market the majors would not seriously come for. Just as its reason for turning down PVC was that “a maker our size would not last a moment,” the starting point of the judgement was not its own strength but the arithmetic of the side that loses on capital. For a mid-sized firm with capital in the ¥500 million range and 700 employees, the very smallness of a photoresist market worth about $25.3M (¥6bn) a year was the place to take shelter.

That said, “it devoted itself to a single line” is not an accurate description. In FY1983 electronic materials made up a little under half of sales, process equipment about a fifth and printing materials about a tenth — the company had reached as far as the coating machines that used its own materials — and photoresist alone was still only 36% of sales in 1986. What it narrowed was not the number of businesses but where it pointed its money and its engineers, without ever formalizing it as a budget. What gave it somewhere to stand when the majors did arrive was that it left that allocation unchanged for a very long time.