Sharp - Company History

Eleven years, and the propelling pencil that ended the subcontracting

In September 1912 Hayakawa Tokuji (早川徳次) started a one-man metalworking business at Matsuicho, Honjo Ward, Tokyo[1], taking subcontract work on sundries such as buckles and fountain-pen fittings. In August 1915 he invented a metal pencil that advanced its own lead[2], and obtained patents in both Japan and the United States[3]. That product, named the Ever-Ready Sharp Pencil[4], carried Hayakawa from jobbing metal subcontractor to a stationery maker with a product of his own. In 1919 he added his own refinements to the durability of the metal fittings, introduced flow-line working in the factory[5] and committed to volume production. Against the imported single-action type, which had to be dismantled to use, a propelling pencil that could be worked with one hand won repeat orders from stationery wholesalers and retailers[6]. Exports to Europe and America grew during the First World War, and just before the Great Kanto Earthquake of 1923 the business had reached a factory of 300 tsubo (about 1,000 square metres), some 200 employees and monthly sales of ¥50,000[7].

The Tokyo factory burned down in the Great Kanto Earthquake of September 1923[8], and Hayakawa lost his wife and two children[9]. Nihon Bungu Seizo (日本文具製造), his sole sales agent, demanded immediate repayment of ¥20,000[10], and Hayakawa answered by handing over such machinery as had survived the fire and by letting the firm use, free of charge, the 48 propelling-pencil patents registered in his own name[11]. He attached conditions — that his trade receivables be paid, that his engineers be taken on, and that he himself serve as their chief engineer for six months — but it was a gentlemen’s agreement, with no contract exchanged[12]. The settlement left him no manufacturing rights to the propelling pencil, and with some seventy of his injured and displaced workers still to support he had no visible route to recovery[13]. Leaving nothing in writing later brought a seizure of assets and a lawsuit that ran two years and ten months, with the instalments continuing until April 1934[14].

Localising the radio: a second founding

In September 1924 Hayakawa set up the Hayakawa Metal Works Institute (早川金属工業研究所) in what is now Abeno Ward, Osaka, and began making radio receivers and their components[15]. At the end of the previous year he had bought an imported crystal radio set for ¥7.50 at the Ishihara watch shop in Shinsaibashi, Osaka, and taken it apart[16]; what he understood from it underlay the change of direction. The business — restarted by selling fountain-pen fittings door to door, because he could not make pencils[17] — turned again in 1925, when he became the first in Japan to succeed in assembling a compact crystal radio set[18]. He stamped the receivers with the mark Sharp, taken from the stationery he had given up[19], and by July of the same year output passed 10,000 sets a month and the works moved to a factory devoted to radios[20].

In 1926 flow-line working was applied to radio manufacture as well, and component exports began to China, South-East Asia and South America[21]. In 1929 the company entered production of mains-powered valve radios[22], and in 1931 it became the first private firm in Japan to take up television research[23]. Within a few years of the start of Japanese radio broadcasting in March 1925 it was producing receivers domestically in volume[24], and then reaching towards the next display technology, television. In June 1934 it built the Hirano plant at Kami-Fukuidocho, Higashi-Sumiyoshi Ward, Osaka[25], widening into a proper factory a manufacturing operation that had begun as a 37-tsubo works-and-dwelling on 235 tsubo of leased land at Tanabe[26].

Incorporation, and a fresh start after the war

In May 1935 Hayakawa reorganised the business as a joint-stock company with capital of ¥300,000, founding Hayakawa Metal Works Institute Ltd[27]. In June 1936 it was renamed Hayakawa Metal Industry Co.[28], dropping the word “institute” from its original style. In May 1942 it changed again, to Hayakawa Electric Industry Co.[29], matching the name to what the business now did[30]. Under the war economy it was compelled to convert to military production — optical weapons, binoculars, magnetic recorders — and could not go on making radios for civilian use. Thirty years had passed since the founding before a company that began in metalworking called itself an electrical manufacturer in its own name[31].

In May 1949 the company listed its shares on the Osaka Stock Exchange[32]. By 1951 it had completed a prototype of the first domestically built television receiver[33]. In the Osaka of that time Matsushita Electric Industrial and Sanyo Electric were gaining strength in the same period[34], and it was said that Osaka, long regarded as a textile city, was turning into a city of light electricals[35]. But where Matsushita and Sanyo were both full-line light-electrical manufacturers, Hayakawa Electric took a direction closer to that of a television specialist[36]. Narrowing the range would show its worth in the postwar television boom, while it also meant setting out behind the two of them in breadth of product and size of sales network[37].

The RCA licence, and television as a specialist’s trade

In June 1952 Hayakawa Electric Industry concluded a technical tie-up with RCA of the United States[38], and in January 1953 entered volume production of television receivers[39]. In July 1954 it built the Tanabe plant in Abeno Ward, Osaka[40], installing endless conveyors to raise receiver output[41]. In March 1956 it listed its shares on the Tokyo Stock Exchange as well[42]. Sales bases followed one after another — a Tokyo branch that April, Hiroshima in August, Nagoya in September 1957 and Fukuoka in 1958[43] — and in December 1957 it pressed ahead simultaneously with an extension to the Tanabe plant and the building of a second Hirano plant[44]. Production and sales were assembled in tandem in about five years[45].

The first reason Hayakawa Electric posted the best results in the industry was that it had put a television expansion programme in place early, in anticipation of the television boom[46]. Where Matsushita and Sanyo were both full-line light-electrical manufacturers, it took a direction closer to a television specialist’s[47]. The second reason lay in not making its own tubes and valves[48]. Matsushita, Hitachi and Toshiba all produced theirs in house, and to bring costs down they had to make more than they consumed themselves and sell the surplus outside[49]. Because that structure required buyers, it was said that Hayakawa Electric, in not making its own tubes and valves, showed a kind of foresight[50]. Its machining, metal pressing included, and the Hayakawa flow-line method were also recognised early within the industry[51].

Into full-line appliances, and the weakness of the brand

In July 1959 the company opened the Yao plant at Yao, Osaka Prefecture, as an integrated works for household electrical appliances[52], and in January 1960 the Nara plant at Yamatokoriyama, Nara Prefecture, making television and radio components[53]. 1960 was also the year it began volume production of colour televisions, took up development of microwave ovens and semiconductor products, and installed IBM machines for head-office administration[54]. In March 1961 a refrigerator factory was newly built inside the Yao plant, and in November a central research laboratory was raised[55] in readiness for electronics development. It launched medical electronic instruments such as electrocardiographs and electrosurgical knives, and succeeded in prototyping a microwave oven[56]. It was in that year, too, that it began developing computers and desktop calculators[57].

In May 1962 it established Sharp Electronics Corporation in the United States[58] in preparation for expanded exports there. That March it extended and rebuilt the refrigerator and air-conditioning plants and entered volume production of microwave ovens, and set up a computer manufacturing department at the Nara plant[59]. In 1963 it achieved volume production of solar cells and silicon photoelectric conversion elements, and released the industry’s first 12-inch portable television[60]. The range widened, but it still could not win buyers who asked for it by name[61]. In the appliance slump of 1964, when more customers chose their maker by name[62], it was written that listing “the makers least often asked for by name”, fewest first, gave the order Hayakawa Electric, Yaou Denki (八欧電機) and Sanyo Electric[63].

Giving up the computer and choosing the electronic desktop calculator

In 1960 computer development was the largest subject among electrical manufacturers, and the major firms were negotiating tie-ups with American companies[64]. Hayakawa Electric, which in radio and television had held its own against the very largest makers, is said to have feared being left behind in this new age[65]. Asada Atsushi (浅田篤), five years into the company, had been arguing over the future with other young employees when word of those discussions reached senior management; a calculator research group was formed, with Asada at its centre[66]. Since almost none of them knew anything about calculators, they went to study from first principles under assistant professor Ozaki Hiroshi (尾崎弘) at Osaka University[67]. The following year the company poured in new graduates in numbers, meaning to commit itself in earnest to developing a large computer[68].

That prospect was optimistic. Hitachi, Toshiba, NEC and Fujitsu had already been developing computers for more than five years, and the Ministry of International Trade and Industry was occupied with how to support them[69]. To an inexperienced newcomer, the official in charge would not listen: Hayakawa doing a large computer — that would be impossible.[70] The technology was too large to carry alone, so in 1962 the company changed its target and moved towards electronifying the mechanical calculator[71]. It fixed its limits — a size that would sit on a desk, in place of the hand-cranked machine, and a price ceiling of $1,389 (¥500,000)[72] — and designed from there. Both the arithmetic circuits and the memory had to be built up transistor by transistor; packed into a box they ran hot, which required a fan, and the fan in turn made the box bigger[73].

In 1964 the company developed the world’s first electronic desktop calculator, the Compet, and entered full volume production[74]. It used 4,000 components including transistors, weighed 25 kilogrammes and cost $1,486 (¥535,000)[75], a little above the target. Even so, a machine that calculated silently and quickly compared with the hand-cranked type won a reputation at home and abroad[76]. In 1966 it developed a calculator using integrated circuits[77], and in the first model of 1967 the component count fell to a sixth, bringing the machine down to four kilogrammes and $639 (¥230,000)[78]. Sasaki Tadashi (佐々木正), head of the industrial equipment division, fixed on low-power MOS integrated circuits and negotiated with American Rockwell of the United States, then working mainly on military work, to secure a contract for their development and supply for calculators[79]. With the MOS LSI calculator of 1969 the component count fell to less than a hundredth and the price dropped below $278 (¥100,000)[80].