Advantest
Corporate History & Strategy

In 1954, Ikuo Takeda left his position at the Ministry of Communications Electrical Research Laboratory and founded Takeda Riken Kogyo (now Advantest) in Toyohashi, Aichi Prefecture, at the age of 30. The founding team consisted of just three people including Takeda, and the chosen business domain was electronic measurement instruments—a field that major manufacturers such as Hitachi and Mitsubishi were not actively pursuing. Takeda's grandfather was Kenji Takeda, a Meiji-era entrepreneur who founded the Toyohashi Railway and a power company, and it is presumed that family financial support helped make the founding possible.

However, the domestic measurement instrument market already had three established players—Yokogawa Electric, Yamatake Honeywell, and Hokushin Electric—who had been active since before the war, placing Takeda Riken as a late entrant. In this environment, Takeda specialized in niche areas that major companies showed no interest in and built an R&D-driven business model of selling unique products with no substitutes at premium prices. The company's technological capabilities were so highly regarded that a vice president of GE visited from the United States, and the firm also secured substantial R&D subsidies from the Ministry of International Trade and Industry.

Takeda later reflected that 'we had no choice but to rely on technology as our weapon because we were bad at business,' and this very attitude formed Takeda Riken's competitive advantage. The company rigorously pursued a policy of carving out markets through technological uniqueness rather than price competition, selling measurement instruments with no substitutes at premium prices and growing steadily as a small but R&D-driven venture. In the 1960s, the company also ventured into developing measurement instruments utilizing minicomputers, seeking to pioneer the new domain of computer-based measurement.

In 1972, the company launched the T320, Japan's first IC test system, developed over four years with subsidies from the Ministry of International Trade and Industry, entering the semiconductor test equipment field. By capturing testing demand for ICs used in calculators and color televisions, this became a foothold for transforming the business from a measurement instrument maker to an IC tester maker. However, the price of neglecting management while being obsessed with R&D was steep—triggered by the 1975 oil crisis, the company fell into the red, and Takeda himself was ousted from the company he founded through a boardroom coup.

Following the oil crisis-triggered slide into losses, Takeda Riken fell into a severe management crisis after founder Ikuo Takeda was ousted in a boardroom coup. The main bank flagged the financial risk and refused to lend, making self-funded restructuring untenable. As a last resort, Takeda turned to Hiroshi Seimiya—his former supervisor at the Ministry of Communications Electrical Research Laboratory—to request a rescue. Seimiya was serving as president of Fujitsu at the time but was recuperating at home due to a worsening chronic illness.

A mentor-protégé relationship dating back to the 1950s existed between Seimiya and Takeda, built on years of trust forged through R&D work in the electronics field. Seimiya mediated differing opinions within Fujitsu and decided on a rescue plan under which 'the banks would provide financial support while Fujitsu would provide management guidance.' Fujitsu committed to equity investment and the dispatch of management personnel, enabling Takeda Riken to restore its credit standing and secure rescue financing from banks.

After the rescue was formally decided, Seimiya summoned Takeda from the Fujitsu hospital in Kawasaki and told him, 'It was quite a struggle.' Seimiya passed away in April 1976, the following year, and it was said that it was precisely because he was on his deathbed that his advocacy moved others within Fujitsu. The survival of the company into which Takeda had poured twenty years of his life—from age 30 to 50—had hinged on the final decision of his former mentor.

In February 1976, Toshimasa Kaiwa, dispatched from Fujitsu, assumed the presidency of Takeda Riken, and the substantive restructuring began. What Kaiwa discovered immediately upon taking office was that cost accounting had never existed at Takeda Riken. The technology obsession of the R&D-driven venture had corroded the very foundations of management in the form of absent profitability management.

President Kaiwa first introduced product-by-product cost management, banned sales staff from offering discounts, and drove reforms in both cost accounting and sales operations. On the business front, he decided to withdraw from the minicomputer instrumentation business—a contributing factor in the company's losses—and concentrate resources on new IC tester development. As IC technology innovation accelerated, improving the new product ratio was designated as the top-priority metric.

The results of this concentrated investment showed in the numbers. The new product ratio (products less than one year since launch) as a share of revenue surged from 4% in 1976 to 45% by fiscal year 1981. By continuously launching new products in the IC tester segment, the company built a structure capable of keeping pace with semiconductor manufacturers' technological innovation, completing the transformation from a mid-tier measurement instrument maker to a dedicated IC tester manufacturer.

What was distinctive about the restructuring process was that Fujitsu simultaneously served as equity investor, management advisor, and a major customer of Takeda Riken. In fiscal year 1980, 22.6% of revenue came from Fujitsu, which actively adopted Takeda Riken's IC testers for its own semiconductor operations, supporting the restructuring through product sales as well.

IC tester sales expansion steadily improved performance, and in February 1983, Takeda Riken listed on the Second Section of the Tokyo Stock Exchange. In fiscal year 1982, prior to the listing, 30% of revenue came from Hitachi and 26% from Fujitsu, with two major domestic semiconductor manufacturers established as core customers. The IPO marked a milestone in the Fujitsu-led restructuring.

Through this restructuring, Takeda Riken transformed from an R&D-driven venture into a listed company with proper management systems. While the founding-era deficiency of absent cost accounting was corrected, a customer concentration structure emerged in which over half of revenue depended on Fujitsu and Hitachi. The business structure in which performance moved in sync with customers' semiconductor investment cycles—inherent to the nature of IC testers—was established during this restructuring period.

In February 1983, Takeda Riken listed on the Second Section of the Tokyo Stock Exchange, completing the Fujitsu-led restructuring. The pre-IPO shareholder structure as of June 1982 showed Fujitsu as the largest shareholder at 28.00%, while founder Ikuo Takeda held a mere 5.68%. This was the result of being forced to relinquish most of his shares during the 1975 coup—he had already lost control of the company he founded before it went public.

On the business front at the time of listing, as of fiscal year 1981, Takeda Riken held a 9.5% global market share (third place) in the LSI tester market, which had a global market size of approximately ¥100 billion. Fairchild held the top share, but Takeda Riken had steadily moved up from fourth place in 1975, establishing its presence in the global market as a dedicated IC tester manufacturer.

The revenue composition for fiscal year 1982, prior to the IPO, showed Hitachi accounting for 30% and Fujitsu for 26%, with two major domestic semiconductor manufacturers comprising over half of sales. IC testers are essential inspection equipment in the semiconductor manufacturing process, with an inherent business characteristic of performance tracking customers' semiconductor investment cycles. This customer base was formed during the Fujitsu-led restructuring period.

Among domestic electronic measurement instrument manufacturers, five other companies existed alongside Takeda Riken: Yokogawa Electric, Anritsu, Ando Electric, Iwatsu Electric, and Matsushita Communication Industrial. Takeda Riken differentiated itself by specializing in IC testers—a growth market—and carved out a unique position within the electronic measurement instrument industry. In September 1985, the company was promoted to the First Section of the Tokyo Stock Exchange.

Fujitsu remained Advantest's largest shareholder after the IPO but in 2005 sold a portion of its 20.45% stake, recovering ¥89.9 billion. In 2017, it sold the remaining 11.35% for ¥53.0 billion, fully dissolving the capital relationship that had lasted approximately 40 years since 1976. While the acquisition cost is undisclosed, the combined proceeds of ¥142.9 billion suggest gains exceeding ¥100 billion.

For Fujitsu, the investment in Advantest began as a rescue decided by a president on his deathbed. The phased share divestiture after overseeing both the restructuring and business growth through approximately 40 years of capital ties represents one model of long-term investment by an operating company. For Advantest, the departure of its largest shareholder accelerated the transition to a genuinely independent management structure.