Company history

In 1930 two professors at the Tokyo Institute of Technology, Kato Yogoro and Takei Takeshi, invented ferrite — the world’s first oxide magnetic material. There was no volume-production process for it and no settled application, so no established manufacturer would take it on. That vacuum was the opportunity. Saito Kenzo, a serial entrepreneur drawn to Kato’s conviction that only original industry deserves the name, founded Tokyo Denki Kagaku Kogyo in Tokyo on 7 December 1935 with paid-in capital of ¥20,000.

That capital was nowhere near enough to build a plant; the ¥100,000 needed came out of the personal fortune of Tsuda Shingo, president of the Kanegafuchi Spinning company, an investment made entirely outside his own business. Only then, in 1937, could the new Kamata plant begin producing ferrite cores — sold as “Oxide Core,” the first such product anywhere in the world. Selling it was another matter: the first president, Yamazaki Teiichi, recalled that “this great invention simply would not sell,” and it was not until 1940, when Matsushita Electric adopted it, that the core found a customer. By the end of the war the company had shipped some five million cores.

What rescued the business was a regulation. The Allied occupation’s superheterodyne order made the ferrite core an indispensable part of the intermediate-frequency transformer in every radio set, and TDK grew up as a radio-components maker. It used the breathing space to widen the material base rather than the product line: a research laboratory at Meguro in 1951, barium-titanate capacitors sold as “Alcon,” magnetic recording tape from the Shimizu plant in October 1952, and the whole ceramic-capacitor operation consolidated at Kotoura in Akita in 1953. From a single material came two businesses — ceramic capacitors and magnetic tape — and with them the habit of treating materials science, not any given product, as the thing the company actually owned.

TDK adopted a divisional structure in June 1961 and listed on the Tokyo Stock Exchange that September. A New York subsidiary followed in 1965, and in 1967 the company wrote down its creed — to contribute to culture and industry through creativity. The obvious threat of the period was the integrated circuit, which the press was already calling a revolution in computing. Yamazaki dismissed the danger flatly: “the appearance of the IC will hardly affect us.” His reasoning was that TDK’s ground was storage, not logic — memory ferrite and magnetic tape — and he kept the company there, building the Chikumagawa tape plant in 1969 and a magnet plant in Shizuoka in 1970.

The decisive move was consumer-facing. TDK made Japan’s first cassette tape in 1966 and in 1968 launched the SD cassette, the world’s first designed for music. It carried the company to a million cassettes a month and world leadership in audio tape — and, more quietly, gave a materials supplier its first product that reached households under its own name. Then, in April 1977, Inai Takayoshi of Matsushita Kotobuki Electronics asked for 50,000 VHS video cassettes at once. TDK’s capacity was under 3,000 a month, which made the order roughly three years of output. Executive vice-president Otoshi Hiroshi took it on the spot — “I’ll take the responsibility” — and the plant ran day and night through the summer until every unit shipped.

The bet was that supply capacity would itself accelerate adoption, and it did. Output reached 100,000 a month by the end of 1977 and then roughly doubled each year for four years. A new plant at Hita in Oita opened in October 1982, and in that year TDK took a little over 30% of the world magnetic-tape market — first place — with tape rising from about a fifth of sales in 1970 to about half by 1982. Operating margin passed 20% in 1979, a record, and in June 1982 the shares were listed on the New York Stock Exchange.

The company renamed itself TDK Corporation in March 1983 and listed in London that May. In the same month, asked by Nikkei Business whether it had anything to follow tape, chairman Sono Fukujiro gave an answer few winners give at the top: “we have already harvested every seed we sowed, and the seeds we plant now do not look like growing into thick trunks.” The hedge against that was already under construction — a magnetic-head plant at Kofu-Minami opened in November 1982, deliberately turning tape cash flow into the next product. When compact discs and magneto-optical media began eroding audio cassettes, TDK bought the Hong Kong head maker SAE Magnetics in 1986 and entered hard-disk-drive heads in earnest, carrying its magnetics know-how across into thin-film head processing.

The early 1990s were hard: sales fell about 10% and recurring profit more than 40% in fiscal 1992. President Sato Hiroshi narrowed the company to four strategic fields — magnetoresistive heads, optical discs, high-frequency components and semiconductor applications — and added research capacity at Narita and Ichikawa. Then came the move that defined TDK’s method. In 1997 it sold a profitable subsidiary, Silicon Systems, for $522.2M (¥63bn) and poured the proceeds into MR heads. Three consecutive years of double-digit growth followed, recording devices grew to nearly 30% of consolidated sales, and in 2000 the American head maker Headway Technologies was acquired as well.

The internet bubble ended that run abruptly. Shrinking telecom demand and collapsing head orders produced TDK’s first operating loss since listing in fiscal 2001, on the order of ¥43.7 billion, with over ¥30 billion of restructuring charges and 853 jobs cut. President Sawabe Hajime’s response was two-stage — lower the break-even point, then rebuild the appetite for risk — and he was blunt about which mattered: “as a manager it is embarrassing to say, but I think it was better to have posted the loss than not to have.” What worried him was the caution that had settled over the organisation: “put a piece of meat down and everyone used to lunge for it; now they wait to see if someone else will.” The company returned to profit in fiscal 2003 — into a market where heads turned over technically every few years and tape only shrank.

In May 2005 TDK paid about $79M (¥9bn) for Amperex Technology Limited (ATL), a Hong Kong maker of lithium-polymer cells. The logic was material, not market: the firing technology behind ceramic capacitors had much in common with battery cathode materials, so this was ferrite reasoning applied to a new product. That October it also bought the Lambda power-supply business from Invensys, giving it both storage and conversion of electricity. When the iPhone arrived in 2007 and smartphones took off, the small acquisition became one of the largest suppliers in the world, at times holding over half the market for smartphone cells.

The other half of the decade was subtraction. In August 2007 TDK handed its branded recording-media sales business to Imation of the United States, licensing the TDK name rather than making the goods; in October 2013 it stopped producing magnetic tape altogether, closing a sixty-year business, and wound up the remaining subsidiary in 2014. What it bought instead were components: the Thai suspension maker Magnecomp in 2007, Densei-Lambda in 2008.

The largest of them came in October 2008, when TDK acquired the German components maker EPCOS for roughly $1.6B (¥170bn) — the biggest deal in its history, funded in large part by the cash the Hong Kong battery business was by then generating. EPCOS supplied precisely what TDK had long lacked: high-frequency parts, sensors, automotive modules and a European customer base. The Lehman shock arrived weeks later and forced heavy losses, and the integration took years to show in the numbers, but the direction — passive components and sensors as the core — never wavered. A ¥8.7 billion bet had financed a ¥170 billion one; the compounding was the point.

The third pillar was assembled by purchase. TDK bought the Swiss magnetic-sensor maker Micronas in March 2016, transferred its high-frequency component business into the Qualcomm joint venture RF360 in February 2017 (selling out of it in 2019), and in May 2017 acquired the American MEMS company InvenSense for about $1.2B (¥140bn), creating a sensor-application segment alongside passive components, magnetic applications and energy. Sensors, passive parts and cells together are what an electrified, increasingly autonomous car needs — the combination was the strategy. Group structure was simplified in parallel, with TDK-EPC merged back into the parent in July 2020.

Consolidated sales passed ¥2 trillion for the first time in fiscal 2022 at $16.6B (¥2.18tn), and reached $14.6B (¥2.2tn) in fiscal 2024 with operating profit of $1.5B (¥224bn). By then the energy-application segment alone was $7.8B (¥1.18tn) — more than half of the group — against roughly a quarter for passive components and a tenth for magnetic applications. A company founded to industrialise ferrite, which became the world’s largest tape maker, now earns most of its living from lithium-ion cells: three complete changes of principal business in ninety years.

The shape of that success is also its exposure, and it rhymes. More than half of revenue from batteries in 2024 looks a great deal like half of revenue from tape in 1982 — and smartphones are a mature market while EV-battery competition intensifies. TDK has answered by replacing executive intuition with a system: roughly eighty business units ranked by capital efficiency and future prospects under ROIC management, with the American AI company SoftEye acquired in June 2025 to seed smart glasses as a next field. Whether a fourth pillar arrives on schedule is the open question of the company’s tenth decade.