The first restructuring in sixty years, and the narrowing to semiconductors and small panels (2012)

What was cut, and the seed that was kept

What ULVAC gave up in this restructuring is plain enough: a tenth of the domestic group’s headcount, the equipment business for large television panels, unprofitable products and accounts in the materials business, and peripheral subsidiaries. Swallowing more than $307.4M (¥30bn) of extraordinary losses in one go across two years, and propping up an equity ratio that had fallen to 14.8% with $188M (¥15bn) of preferred shares, amounts to buying time with the help of the capital market. That the phrase “the first business restructuring since its founding sixty years ago” survives in the securities report suggests how exceptional the episode was for this company.

What is interesting is that the seed of the next pillar was sown in the very year of the cutting. Development of equipment for logic semiconductors began with a customer’s approach in 2012 — the same period in which the company solicited voluntary redundancies and recorded $343.4M (¥27bn) of extraordinary losses. The decision to shrink and the start of a development programme that would take six years shared a single year. What was kept in a year of losses does not appear in the accounts, but the change in the revenue mix in the 2020s gives the answer late. The substance of a decision summarized in a phrase — concentration on semiconductors and FPD — shows up less in the list of what was cut than in the one item that was not.