FUJIFILM
Corporate History & Strategy

In the early 1930s, Dainippon Celluloid (now Daicel) had established a solid position in the domestic market as a chemical manufacturer centered on celluloid products. Its mainstay celluloid materials for stationery, daily goods, and toys were facing margin pressure from product commoditization and price competition, and a business structure confined to material supply offered limited long-term growth prospects. Expansion into higher value-added fields leveraging celluloid-based material technology had emerged as a strategic imperative.

At the time, the photographic film market was monopolized by Western manufacturers such as Eastman Kodak and Agfa, and neither mass production technology nor quality control systems had been established domestically. Meanwhile, demand was expected to increase in areas including press, education, and documentation, as well as military applications such as aerial photography and reconnaissance recording, and policy authorities were showing growing interest in domestically sourcing photographic materials. Reducing import dependence was becoming an industrial policy priority, creating an environment that called for establishing domestic manufacturing capabilities.

For Dainippon Celluloid, photographic film was a field where material technology extending from celluloid could be directly applied. Since cellulose acetate was used for the film base, the company's knowledge of material properties could be transferred to product development. However, this was a business with a high R&D ratio that required long-term investment and extensive trial and error before achieving stable mass production quality, with little prospect of short-term revenue contribution. It was an option that carried risks beyond what the existing business's profitability could readily sustain.

In 1934, Dainippon Celluloid decided to spin off the photographic film business as an independent corporation rather than retain it as an internal division. In September of that year, Fuji Photo Film Co., Ltd. was established as an autonomous business unit responsible for the entire value chain from R&D to manufacturing and sales. Because the business required a long development period with uncertain investment recovery, the company chose a structure that separated it from the parent's profit-and-loss structure, enabling independent decision-making and capital deployment.

Simultaneously, construction of a production facility in the Ashigara area of Kanagawa Prefecture was initiated. Ashigara was selected for its water quality and climate conditions suited to film manufacturing processes, providing the high-quality water resources essential for emulsion coating and developing processes. While the factory construction required large-scale capital expenditure, the spin-off approach allowed the parent company to insulate its existing operations from financial impact while building a manufacturing infrastructure dedicated to photographic film.

During the same period, the Ministry of Commerce and Industry was promoting industrial policies to encourage domestic production of photographic and cinematographic film, with support measures for capital investment and technology development being put in place. Fuji Photo Film was able to reduce the burden of capital expenditure to a degree by aligning with national policy. The establishment as an independent corporation separated the scale and pace of capital deployment from the parent company's judgment, creating a framework for pursuing commercialization independently while leveraging government support.

In its early years, Fuji Photo Film served as a domestic supplier of cinematographic and photographic film, with demand largely dependent on government and military orders. Competitiveness in the civilian market had not yet been established, and quality gaps with Western products remained a challenge. However, the limited number of domestic film suppliers provided a stable order base, creating an environment that allowed the company to concentrate resources on quality improvement and optimization of mass production processes.

Through manufacturing at the Ashigara factory, foundational technologies accumulated in areas including emulsion coating, formulation of photosensitive materials, and standardization of developing processes. While initial product quality did not match Western products, proprietary knowledge in fine particle control and sensitivity adjustment was developed through repeated prototyping and refinement. These technologies directly contributed to improving photographic film performance and also laid the technological foundation for derivative businesses in later years, including medical film, magnetic recording materials, and optical films.

The 1934 spin-off establishment was not a decision aimed at short-term profit maximization but a choice to build a long-term business foundation while leveraging the national policy framework. While reliance on wartime demand was a factor, the accumulation of facilities, personnel, and manufacturing technology during that period formed the prerequisites for expanding into civilian markets after the war. The decision-making structure as an independent corporation contributed to building the competitive foundation as a dedicated photographic film manufacturer.

In the late 1950s, Fuji Photo Film, which had built its business foundation in photographic materials, was paying attention to electrophotography as a technological trend distinct from silver halide photography. Electrophotography was a method that electrically controlled charging, exposure, and development, demonstrating high processing speed and reproducibility for copying applications. In the United States, Xerox Corporation had successfully commercialized copiers and was rapidly gaining market share in the office equipment market, demonstrating the commercial viability of electrophotographic technology.

Domestically, demand for mechanization of office work was emerging, but no company possessed the capability to commercialize electrophotographic technology internally. For Fuji Photo Film, electrophotography represented an option for discontinuous expansion of the business portfolio, rather than an extension of silver halide photography. However, given the development difficulty and investment scale, in-house commercialization carried significant risk, and collaboration with an external partner was being considered as a practical approach.

In 1962, Fuji Photo Film established Fuji Xerox Corporation as a 50-50 joint venture with Rank Xerox of the United Kingdom. The arrangement was designed so that the Fuji Photo Film side handled manufacturing while leveraging Xerox's brand and channels for sales. Notably, this was not a simple licensing agreement but a joint venture structured with the premise of domestically internalizing the manufacturing technology. The design aimed to advance technology transfer and market development simultaneously while distributing the risk of initial investment.

Fuji Photo Film applied its quality control expertise cultivated in photosensitive materials and precision processing to the domestic production of copiers, while utilizing the Xerox brand and sales network to accelerate market penetration. The joint venture establishment was a choice to gradually internalize electrophotographic technology in-house while avoiding the risk of solo R&D. A future transition to an integrated manufacturing-and-sales structure was envisioned.

Following its establishment, Fuji Xerox rapidly expanded its business scale alongside the growth in copier demand. Electrophotographic copiers matched the need for office work efficiency, and by the 1970s, the company had established a leading position in the domestic copier market. In 1971, the manufacturing division was transferred to Fuji Xerox, completing the transition to an integrated manufacturing-and-sales structure. The establishment of a business with a revenue structure distinct from photographic materials contributed to risk diversification for Fuji Photo Film.

Application development based on electrophotographic technology also expanded into industrial fields beyond copying applications. The 1962 joint venture establishment served as the starting point for a photographic materials manufacturer to extend its business domain into office equipment and industrial machinery. However, the joint venture structure that divided markets between Japan and the United States later became a factor in complicating decision-making during business restructuring, a structural issue that persisted for decades until the eventual full acquisition.

By the 1960s, against the backdrop of Japan's high economic growth, demand for amateur photography was expanding rapidly. Home photography, which had been centered on black-and-white film, was shifting to color primarily for travel and event documentation, with the simultaneous achievement of color reproduction and ease of use becoming a market priority. Fuji Photo Film had been releasing products with incremental improvements in sensitivity and color stability, but challenges remained in developing compatibility and quality when compared with overseas products.

At the time, differences in developing processes posed a structural barrier to expanding the color film market. With different processing methods coexisting domestically and internationally, film that could only be developed at specific labs constrained user convenience and hindered distribution channel expansion. Whether film could be processed at overseas labs directly affected export competitiveness, and securing developing compatibility was a critical consideration in product design when targeting international markets.

In 1965, Fuji Photo Film launched the color film "N100." The distinctive feature of this product was its adoption of oil-protect type color. The oil-protect method encapsulates couplers in oil droplets, improving developing process stability and compatibility with other manufacturers' labs compared to the conventional water-soluble coupler method. In addition to improvements in color reproduction and graininess, the design was conscious of enabling processing at major overseas developing lines.

Targeting 35mm format primarily for amateur use environments, the product was positioned at a price point aligned with the market. "N100" was not a product that sought differentiation through a single performance metric, but was designed to enhance versatility of use by balancing color reproduction, graininess, developing compatibility, and price. Unlike competing products that pursued high performance exclusively, it embodied a product strategy prioritizing market penetration.

"N100" was positioned not merely as a domestic market product but as a product premised on export. The adoption of oil-protect type color secured developing compatibility at overseas labs, broadening the distribution potential of Fuji Photo Film's color film in international markets. In coordination with the establishment of overseas offices—a New York subsidiary the following year and a German subsidiary thereafter—the color film business underwent a structural transition from domestic-dependent to export-driven.

The shift in product design also represented a decision to broaden the competitive axis from performance alone to market adaptability as a photographic film manufacturer. By incorporating the distribution consideration of developing compatibility into product specifications, a foothold was established for securing a distinctive position even in the international market dominated by Kodak. Following "N100," Fuji Photo Film established the product development direction that would continue through the Fujicolor F-II 400 in the 1970s.

By the 1970s, the color photography market was entering a mature phase, yet new expansion opportunities were emerging in terms of applications. In fields such as travel, press, and home documentation, demand for photography in low-light conditions that exceeded the capabilities of conventional film sensitivity was increasing. Demand for high-sensitivity film that could enable shooting without flash in indoor, twilight, and nighttime settings was becoming apparent. However, increasing sensitivity tended to worsen graininess and destabilize color reproduction, confronting the technical constraints of silver halide photography.

Overseas manufacturers were advancing high-sensitivity products, but the trade-off between sensitivity and image quality was clear, and users accepted the sacrifice in expressiveness. For Fuji Photo Film, this domain represented an opportunity not merely for performance catch-up but for establishing presence in international markets by crossing a technological discontinuity. Following the liberalization of color film imports in 1971, direct competition with Kodak had intensified, and high-sensitivity film was a product category directly linked to both export expansion and brand building.

In September 1976, Fuji Photo Film announced the high-sensitivity color negative film "Fujicolor F-II 400" at an international trade fair in Germany. This product combined CLG (Concentrated Latent-image Grain) technology with ICL (Image Controlling Layer) technology to achieve both fine graininess and color reproduction quality in the ASA 400 high-sensitivity range. Unlike the conventional approach of incrementally raising sensitivity, this was a technological choice that addressed the photosensitive grain structure itself.

In product planning, versatility for use both indoors and outdoors was emphasized. The design specifically targeted applications such as indoor photography and twilight shooting without flash, bringing high sensitivity into everyday shooting situations. The choice of a German international trade fair as the announcement venue signaled that this was a product premised on export. It was rolled out in stages—domestic launch in October and export commencement in December—as a product introduction aimed at establishing technological superiority in international competition.

The launch of Fujicolor F-II 400 directly contributed to Fuji Photo Film's business performance. Demand for high-sensitivity film expanded both domestically and internationally, and the company achieved record-high profits in the fiscal year ending October 1977. Demonstrating presence in a product category where technological differentiation was possible within the Kodak-dominated international market contributed to raising awareness of the Fujicolor brand.

The commercialization of high-sensitivity film based on CLG technology was also an effort to push the technical boundaries of silver halide photography. Product development rooted in fundamental research on photosensitive grain structure design was continuous with the subsequent evolution of photosensitive material technology. F-II 400 is positioned not only as a single product but as the starting point for Fuji Photo Film's technology-driven competitive approach in international markets.

From the late 1990s through around 2000, the rapid proliferation of digital cameras was driving the photographic film market into a phase of structural contraction. As shooting behavior shifted to digital primarily in household applications, the prospect of a medium-to-long-term decline in film consumption was becoming increasingly realistic. For FUJIFILM, photographic film still accounted for a high proportion of revenue, and the demand decline posed a direct concern for overall consolidated performance.

Meanwhile, Fuji Xerox, established as a joint venture in 1962, had grown to a scale of approximately 1 trillion yen in revenue, centered on its copier and printer business. The office equipment market continued to expand alongside IT advancement, and profitability remained at relatively high levels. However, for FUJIFILM, Fuji Xerox was an equity-method affiliate, and its revenue was not reflected in consolidated figures. As photographic film revenue was expected to decline, how to redesign the overall revenue composition became a critical management issue.

In the fiscal year ending March 2000, Fuji Photo Film reported a revenue decline, and the disruption in the photographic film market began to manifest in business results. That same year, Shigetaka Komori assumed the presidency, and a generational transition in management was underway. Under the new leadership, breaking away from photographic film dependence and restructuring the business were explicitly positioned as management priorities, and options for changing Fuji Xerox's status within the consolidated framework began to be concretely explored.

In March 2001, FUJIFILM decided to acquire an additional 25% of Fuji Xerox shares from its partner, Xerox Corporation. This raised the ownership stake from 50% to 75%, making Fuji Xerox a consolidated subsidiary. This decision was strongly motivated by the aim of restructuring revenue and business composition on a consolidated basis, rather than immediately pursuing technology integration or business restructuring.

Fuji Xerox was a company with approximately 1 trillion yen in revenue, and consolidation meant its revenue would be added to FUJIFILM's consolidated figures. A structure emerged where the decline in photographic film revenue could be offset by copier business revenue. Since this was an additional acquisition within an existing joint venture relationship, the business risk relative to invested capital was comparatively contained. It was a decision to buy time through changes in accounting consolidation scope.

The distinguishing feature of this decision was that it restructured the consolidated revenue composition by reorganizing existing group relationships, rather than through investment in new businesses or divestiture of existing ones. Building a replacement business for photographic film in a short timeframe was impractical, but consolidation was expected to prevent a sharp deterioration in overall performance while securing the time needed for business transformation.

From fiscal year 2001 onward, Fuji Xerox's revenue was added to FUJIFILM's consolidated accounts, significantly expanding the overall scale. Fuji Xerox was a business with stable profitability, contributing continuously to overall performance. As a result, the company transformed from a firm centered on "photographic film" into a conglomerate possessing two business domains with distinct characteristics—"photographic film" and "copiers."

In October 2006, the company transitioned to a holding company structure, positioning Fuji Film and Fuji Xerox under FUJIFILM Holdings. In 2007, both companies relocated their headquarters to Tokyo Midtown, and practical integration efforts including harmonization of human resources and labor management were undertaken in earnest. The consolidation as a subsidiary went beyond an accounting measure, functioning as the starting point for the subsequent transition to a holding company structure and management integration.

The consolidation of Fuji Xerox was not an immediate solution to the contraction of the photographic film business, but it served as a buffer that prevented a sharp decline in consolidated revenue while securing investment time for the next growth businesses such as LCD materials and pharmaceuticals. The 2001 decision was the starting point of a time-design approach for advancing the business portfolio transformation gradually rather than executing it all at once.

Around 2000, the decline in photographic film demand had become reality with the spread of digital cameras, and FUJIFILM was confronting structural revenue decline. While the 2001 consolidation of Fuji Xerox had provided support for consolidated revenue, the challenge of establishing an autonomous growth business remained. Determining which field to designate as the next major business to replace photographic film had become the most critical management issue.

At this juncture, the LCD display materials market attracted attention. Around 2004, the worldwide transition from CRT televisions to LCD televisions was accelerating, and LCD panel production volumes were expanding rapidly. FUJIFILM made its investment decision based on the trajectory of LCD displays becoming the mainstream for next-generation televisions, positioning the polarizer protective film (TAC film)—a core component—as its next growth business. TAC film was a product where precision coating technology cultivated in photographic film could be directly applied, and the company held approximately 80% of the global market share at the time.

In April 2005, FUJIFILM established FUJIFILM Kyushu Co., Ltd. as a mass production facility for polarizer protective film and constructed a factory in Kikuyo, Kumamoto Prefecture. Against the backdrop of large-volume supply requests from LCD display manufacturers, capital expenditure of approximately 40 billion yen per production line was assumed. From the commencement of the first line in 2006 through the eighth line in 2013, a total of approximately 300 billion yen was invested in building a large-scale mass production system.

Behind this investment decision was the conviction in the technological advantage that TAC film was an indispensable component for LCD panels and that substitute materials would not easily emerge. FUJIFILM's precision coating technology functioned as a barrier to entry, and the decision was made to build capacity to meet expanding demand while maintaining the company's dominant position with 80% global share. The ability to repurpose photographic film manufacturing equipment and personnel for LCD materials also contributed to investment efficiency.

Driven by the rapid expansion of LCD television demand, the FPD materials business grew revenue, reaching a record high of 218.5 billion yen in FY2010. It partially compensated for the decline in photographic film revenue, temporarily establishing a position as a core growth business in FUJIFILM's portfolio.

However, from FY2011 onward, revenue began declining due to the plateauing of LCD panel demand and the emergence of substitute materials, and currently hovers around 100 billion yen. Line additions ceased after 2013, and the business has transitioned to a mature phase. While the investment achieved meaningful results as a growth initiative leveraging photographic film technology assets, the maturation of the market meant that FUJIFILM was once again compelled to search for its next growth axis.

In the latter half of the 2000s, FUJIFILM was positioning its medical and life science business as the next growth axis in response to the structural contraction of the photographic film business. While the company had established a meaningful business scale in diagnostic imaging with the X-ray diagnostic imaging system FCR and the image management system PACS, its medical business was skewed toward diagnostics when viewed across the broader healthcare domain. Building an integrated framework spanning prevention, diagnostics, and therapeutics had been recognized as a medium-to-long-term challenge.

Meanwhile, Toyama Chemical possessed a promising drug development pipeline centered on antiviral and central nervous system drugs, but escalating R&D costs and the demands of global expansion were straining its management. The company reported a net loss in fiscal year 2007, and as a mid-tier pharmaceutical company, the constraints of sustaining independent operations were intensifying in terms of both capital and management capacity. Capital participation from outside the industry was emerging as a practical option for maintaining R&D investment.

In February 2008, FUJIFILM Holdings announced the effective acquisition of Toyama Chemical. The framework involved Toyama Chemical conducting a third-party share allotment of approximately 30 billion yen, with FUJIFILM executing a tender offer to acquire subsidiary status. The resulting ownership structure showed FUJIFILM holding 66% and Taisho Pharmaceutical holding 34%. An acquisition of a pharmaceutical company by a non-pharmaceutical manufacturer was unusual at the time, representing a decision aimed at discontinuous expansion of the business domain.

Through this acquisition, FUJIFILM made explicit its policy of expanding its diagnostics-centered medical business into the therapeutic domain. The plan was to inject R&D funding into Toyama Chemical's pipeline, including the anti-influenza drug T-705 (later known as Avigan), to support continued drug development. The potential application of image processing technology accumulated through diagnostic imaging and emulsification-dispersion technology cultivated in photographic film to drug development processes was also presented as an objective.

The acquisition of Toyama Chemical gave FUJIFILM a business foundation encompassing pharmaceutical R&D, manufacturing, and sales. In 2014, T-705 received conditional approval (brand name Avigan) and was adopted by the government as a stockpile drug for novel influenza preparedness. The approval of part of the drug pipeline demonstrated that the discontinuous business expansion of a photographic film manufacturer entering the pharmaceutical business was progressing with tangible results.

In a broader context, the Toyama Chemical acquisition was a decision that confirmed the direction of FUJIFILM's healthcare strategy. By expanding the business domain from diagnostics to therapeutics, it became the starting point for a series of subsequent healthcare investments, including entry into bio-CDMO and the acquisition of Hitachi's diagnostic imaging business. While the pharmaceutical business alone remained limited in revenue scale, it functioned as the substantive departure point for the management decision to position healthcare as the company-wide growth axis.

From the latter half of the 2000s, the pharmaceutical industry was shifting its center of gravity from small-molecule drugs to biopharmaceuticals. Biopharmaceuticals, represented by antibody drugs, use cells and microorganisms, making manufacturing processes more complex and increasing the capital required for large-scale culture equipment and stringent quality control. Horizontal specialization—separating R&D from manufacturing—was advancing, and outsourcing demand for contract development and manufacturing organizations (CDMOs) was expanding.

FUJIFILM, facing declining photographic film demand that necessitated a redesign of its business portfolio, possessed long-standing technological accumulations in chemical synthesis, precision manufacturing, and quality control. Rather than developing and marketing its own new drugs, the option of specializing in manufacturing processes—thereby avoiding direct competition with pharmaceutical companies—was explored. The growing investment burden on pharmaceutical companies and expanding outsourcing demand provided an entry opportunity through contract manufacturing.

In 2011, FUJIFILM acquired all shares of MSD Biologics (UK) and Diosynth RTP (US) from Merck & Co., Inc. for approximately 40 billion yen, directly entering the biopharmaceutical CDMO business. Rather than building manufacturing capabilities from scratch, the company acquired existing operations with GMP certification and commercial production track records, an approach that reduced start-up time and technology transfer risk.

This was a decision to concentrate investment in manufacturing processes rather than pursue R&D-driven entry. By committing to the role of contract manufacturer, the company diversified its customer base while avoiding competition with pharmaceutical companies, linking invested capital recovery directly to manufacturing capacity and utilization rates. While a late entrant, the acquisition immediately secured commercial production capabilities, with a strategy to transition into phased facility expansion.

Following the acquisition, FUJIFILM advanced facility expansion of the CDMO business centered on its European and US operations. In the latter half of the 2010s, concentrated investment in large-scale culture tanks was executed in Denmark and North Carolina, with commercial production capacity progressively expanded. The 2019 acquisition of a Biogen subsidiary brought total culture capacity to approximately 150,000 liters, securing the capability to handle large-scale projects.

The 2011 entry was not a single-year diversification but a business construction premised on long-term return on invested capital. The entry format focused on manufacturing processes produced a structure where competitive advantage was confined to manufacturing capacity and supply speed. Subsequent investments—including the Biogen subsidiary acquisition and expansion of the Denmark facility—accumulated to approximately 1 trillion yen in scale, making this a core investment initiative within FUJIFILM's healthcare business.

Fuji Xerox, established in 1962, had its origins as a joint venture with Xerox of the United States and had expanded its operations centered on the Asia-Pacific region. Meanwhile, the regional division structure—where the Western markets were served by Xerox—had been entrenched for years, creating structural constraints on optimizing R&D, component procurement, and brand strategy. This joint venture format inherently contained delays in decision-making and governance complexity as business scale expanded.

In the latter half of the 2010s, issues of improper accounting at Fuji Xerox's overseas subsidiaries surfaced. Revenue overstatement was discovered at sales subsidiaries in New Zealand and Australia, with cumulative profit inflation of 37.5 billion yen identified. This problem exposed the limitations of the supervisory framework under the joint venture structure, making governance strengthening and business rebuilding across FUJIFILM Holdings an urgent priority.

Additionally, the paperless trend had advanced primarily in Western markets, and the MFP and printer market had entered a mature phase. With the declining trend in print volumes continuing, growth potential for the document business was becoming limited. For FUJIFILM, the document business remained a major pillar of revenue and profit, but under the joint venture structure, the company could not fully exercise leadership over integrated restructuring of the Japan-US businesses.

In March 2018, FUJIFILM Holdings announced the acquisition of Xerox Corporation of the United States. Under the plan, Xerox would first fully acquire Fuji Xerox, then conduct a third-party share allotment that FUJIFILM would underwrite for approximately 670 billion yen, acquiring 50.1% of Xerox shares. This would make FUJIFILM the parent company of a reborn Xerox, overseeing MFP operations across Japan and the United States.

The objective was to integrate the MFP and printer businesses that had been divided between Japan and the United States, unifying R&D, production, component procurement, and sales. Management projected annual synergies of approximately $1.2 billion by fiscal year 2020, with plans to simultaneously pursue structural reforms including workforce reductions and factory consolidation. The decision was to fundamentally overhaul the cost structure by integrating and redesigning the mature MFP business.

Had this plan been realized, FUJIFILM would have become one of the world's largest operators in the MFP market, potentially altering the competitive landscape against HP and Canon. In terms of dissolving the Japan-US division structure that had persisted for 56 years since the joint venture's establishment and transitioning to globally integrated management, this was the largest M&A initiative in FUJIFILM's history.

However, following the acquisition announcement, activist shareholders of Xerox—including Carl Icahn and Darwin Deason—strongly opposed the transaction terms. Their arguments included that Xerox's corporate value was being undervalued, and that the board's governance itself was problematic, leading to repeated management departures and policy reversals at Xerox. Ultimately, in May 2018, Xerox unilaterally announced the dissolution of the acquisition agreement, and the integration plan effectively collapsed.

Following the failed acquisition, FUJIFILM shifted its approach and achieved full ownership of Fuji Xerox in November 2019 by dissolving the joint venture agreement with Xerox. The acquisition price was approximately 250 billion yen, taking the form of purchasing the 25% Fuji Xerox shares held by Xerox. While integrated Japan-US management was not realized, the company established a structure enabling independent management decisions over the Asia-Pacific business.

In April 2021, Fuji Xerox was renamed "FUJIFILM Business Innovation," completing the departure from the Xerox brand. The sales agreement with Xerox was also terminated, and the company transitioned to operating under its own brand. The Japan-US relationship that had continued for approximately 60 years since the 1962 joint venture establishment was settled not through integrated management but through complete separation.

In the latter half of the 2010s, the weight of biopharmaceuticals in the pharmaceutical industry increased further, and horizontal specialization separating development and manufacturing became established. Pharmaceutical companies concentrated resources on R&D, while outsourcing of manufacturing to CDMOs became routine. For biopharmaceuticals that had entered the commercial production stage, large-capacity culture tanks were a prerequisite for transactions, and CDMOs lacking large-scale facilities faced upper limits on the size of projects they could accept.

FUJIFILM's CDMO business, since its 2011 entry, had operated primarily with small-to-medium-scale tanks, mainly undertaking projects at the clinical stage or with limited production volumes. The inability to handle large-scale commercial production was becoming a constraint on revenue growth. In the CDMO market, where facility scale dictated competitiveness, securing large-scale culture equipment had emerged as the next condition for growth.

In 2019, FUJIFILM acquired Biogen Denmark Manufacturing, a manufacturing subsidiary of US-based Biogen, for approximately $890 million. This simultaneously secured six large-scale culture tanks of the 15,000-liter class, production facilities, approximately 800 personnel, and supply contracts with multiple pharmaceutical companies. Rather than constructing new facilities, the decision to acquire an operating commercial production site was intended to accelerate the start of return on invested capital.

The acquisition expanded total culture capacity to approximately 150,000 liters, enabling entry into large-scale commercial production projects that had previously been beyond reach. CDMO revenue expanded from approximately 40 billion yen in fiscal 2018 to approximately 70 billion yen, transitioning the business toward operations premised on mass production capability. The approach of simultaneously acquiring facilities and contracts created a structure where revenue contribution began without waiting for sales ramp-up.

The acquisition of the Biogen subsidiary transformed FUJIFILM's CDMO business from primarily clinical-stage contracting to large-scale commercial production capability. The Denmark facility held strategic significance for European market access and supply stability, becoming a core element of the global multi-site framework.

This acquisition occupies a midpoint in the chain of CDMO facility investment that began with the 2011 entry. The characteristic of the CDMO business—where expansion of manufacturing capacity directly translates into expansion of serviceable project scope—provided a structure that justified progressive large-scale investment. Through this acquisition, FUJIFILM further clarified the continuity of its investment in the healthcare domain.

In the latter half of the 2010s, FUJIFILM was advancing its business transformation away from photographic film and positioning medical and healthcare as a core growth domain. While the company held a global track record in diagnostic image management software such as PACS and image analysis software, it lacked a sufficient lineup of large-scale diagnostic imaging equipment such as MRI and CT. In the medical device market, the ability to provide equipment and software as an integrated package was directly linked to competitiveness, and differentiation through software alone was becoming increasingly difficult.

Meanwhile, Hitachi, Ltd. was accelerating its strategy of business selection and concentration and was exploring the divestiture of its diagnostic imaging equipment business. While Hitachi possessed equipment technology for MRI and CT, the business structure required scale to maintain regional sales and maintenance networks, making it difficult to secure profitability as a standalone operation. For FUJIFILM, which had lost in the bidding for Toshiba Medical in 2016, this represented an opportunity to rapidly complement its equipment business.

In December 2019, FUJIFILM Holdings announced the acquisition of Hitachi, Ltd.'s diagnostic imaging equipment business for approximately 179 billion yen. The scope covered MRI, CT, ultrasound diagnostic equipment, and related operations, with revenue of approximately 143 billion yen. This acquisition aimed to build a framework capable of integrated development and provision of both equipment and software.

FUJIFILM envisioned combining its accumulated AI-based image analysis and diagnostic support system technology with Hitachi's equipment technology to improve diagnostic accuracy and enhance imaging workflow efficiency. Applications such as AI-assisted lesion detection in CT images and automatic optimization of imaging parameters were anticipated. The decision was to build a business foundation to compete with major Western medical device manufacturers such as Siemens and GE Healthcare by integrating hardware and software.

The acquisition was completed in March 2021, and FUJIFILM's medical device business transitioned to a structure capable of providing an integrated offering from equipment to software. The addition of MRI and CT product lineups enabled comprehensive proposals in combination with existing image management systems and ultrasound diagnostic equipment.

This acquisition is positioned as the third pillar of FUJIFILM's healthcare strategy, following the Toyama Chemical acquisition (therapeutic domain) and the construction of the bio-CDMO business (contract manufacturing). The acquisition of diagnostic equipment completed the business infrastructure spanning prevention, diagnostics, and therapeutics, building a concrete foundation for the healthcare-centric vision articulated in VISION2030.