Exiting optical media; back to a single components segment (2015)

Folding up a world first

It is easy to read this as inevitable — the market vanished, so the company left. But operating profit in recording media and other businesses had returned to a $1.9M (¥196m) profit in the year to March 2014; the business was not failing on the spot. What Taiyo Yuden folded up was twenty-seven years of accumulation, in a format it had named itself and had been first in the world to commercialise across three generations, through to write-once Blu-ray. The heart of the decision was not whether it could win on technology, but whether it would keep committing people and equipment to a market that was thinning.

That said, this can only be called a good decision because we know that passive components grew afterwards. The company itself explained the effect on results as slight. The main reason operating profit rose from ¥13.2 billion to ¥23.4 billion the following year was capacitor demand, not the end of optical media. The equipment it let go passed to a magnetics laboratory, and a thin stream of optical-disc demand survived. The quality of an exit is measurable less on the side of the business folded up than on what the freed hands were put to.