01 August, 2006

ECB Aims to Become the World’s Leading LCD Backlight Unit Manufacturer

Omron completes acquisition of Pioneer Corp.’s backlight subsidiary to establish Omron Precision Technology Co., Ltd.

Article Summary
Based on a preliminary agreement in March of this year between Omron Corporation and Pioneer Corporation, Omron acquired 100% of the stock in Pioneer Precision Machinery Corporation (Pioneer PMC) on August 1, 2006. Accompanying the acquisition, Pioneer PMC’s company name was officially changed to Omron Precision Technology Co., Ltd. (OPT). On the evening of the same day, a commemorative event was held in Kawagoe City, Saitama Prefecture to celebrate the establishment of OPT with approximately 300 employees and associates in attendance. With steady growth in demand expected for LCD backlight units (BLU), Omron is striving to become the global market leader. By complementing our own BLU range with OPT’s small- and medium-size BLUs, and the large-size BLUs developed by Tama Fine Opto Co., Ltd., Omron can now offer a complete product range covering all sizes (See also e-ONR article “ECB announces preliminary agreement to acquire Pioneer Corp.’s backlight subsidiary” released on April 28, 2006.)

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On August 1, a commemorative event to celebrate the inauguration of OPT was held at the Alcazar Geihinkan event hall in Kawagoe City, Saitama Prefecture. Some 300 people were in attendance, including all of OPT’s 270 employees who joined BLU business-related staff from ECB. The event was opened with an address by OPT’s new President, Isamu Horimoto, followed by the introduction of new directors, and a congratulatory message from Omron Corporation resident & CEO Hisao Sakuta. OPT’s new Chairman, Yoshio Nakano, then gave a toast, expressing his ambitions for the company’s future: “I have two wishes. First of all, I want to make OPT a company that all employees can take pride in. Secondly, I also want to make it a company that earns respect from society. Let us all combine our efforts to realize these goals.”


ECB President Soichi Yukawa presented a commemorative gift to OPT, and expressed his expectations that the new company would help Omron become the world leader in the LCD backlight business. After rallying talks from 3 SBU general managers, and a story on how OPT’s name originated from General Manager Akihiro Tomita of the Microlens Division, the event was closed with an address by the upcoming OPT Labor Union President Isamu Asano.

Address by OPT President Horimoto
Today, a total of 1,570 people, including 270 OPT employees and 1,300 employees from its affiliates in and outside Japan, have become new members of the Omron Group. We at OPT are determined to do our part in helping ECB achieve its goal of becoming the world’s leading backlight manufacturer, by cooperating with them and promoting collaborative innovation. Omron and OPT will join hands to expand our backlight business by strengthening our product lines across all sizes of BLUs, in order to further boost competitiveness. Scale expansion will allow us to take advantage of joint procurement and make effective utilization of production facilities. As such we will work to increase cost competitiveness by leveraging advantages of scale and aim for increased market share. At the same time, we will also strive to develop and supply products that are appealing to our customers by refining our core competency of precision processing technology and also by drawing on the reservoir of advanced technologies that Omron possesses. To me this is exactly what synergies are all about. Today, the LCD industry has begun to see the weeding out of some under-performing LCD BLU makers caused by intense market competition. To survive in this fiercely competitive market, we need to make tremendous efforts and accept tough operational challenges. Let us all take a powerful step toward realizing ECB’s goal of becoming a world-class manufacturer of BLUs for small to large-size LCDs.

OC President & CEO Sakuta’s Congratulatory Address
Congratulations everyone for the start of the new company, OPT! As you probably know, Omron has set a goal of generating 100 billion yen in revenues from our BLU business as a whole, including small, medium and large sizes, by FY2008. With OPT joining us, we’ve got a really powerful partner. I personally am very interested in essential electro-mechanical fields such as pressing, molding, plating and soldering, so I am eager to learn more about OPT’s resin molding technology and rubber and chemicals business. Omron has a very flat organization. That means you should never hesitate to speak out. We will also express our frank opinions to you. You should have many discussions with your colleagues and others as we create a new corporate culture for OPT. Omron’s corporate philosophy stresses “self-reliance.” In Omron, demonstrating “self-reliance” means “thinking and acting on your initiative.” I personally believe that without self-reliance, people cannot effectively demonstrate their creativity. Omron is comprised of roughly 120 business units. I have a strong belief in the potential of the backlight business and I’m confident that it will become the second largest BU for Omron, behind the relay business. No matter how big it becomes, you should preserve the pioneering spirit of a small “venture” company and continue competing in the global marketplace by relying on your creativity. I ask OPT staff to start by reading the Omron Principles thoroughly and confirm what you have taken from them by discussing with your colleagues. Once these principles are shared by all, then all that is required is self-reliance. Acting and thinking on your own initiative – that is what Omron expects from all our employees. Don’t hesitate. I will also join you in fully demonstrating self-reliance and creativity.

ECB President Yukawa’s Address
I would first like to express my deepest appreciation for those who have dedicated their efforts and worked hard to realize the inauguration of the new company today. In fact, we at ECB are expecting a lot from the OPT staff present today, in helping us realize the dream of becoming the leading player in the global backlight market. ECB presently generates yearly sales revenue of 120 billion yen. With the help from all of you here today, we are aiming to further enhance the presence of ECB as an internal business company that supports the Omron Group’s growth. I also wish OPT people to adopt the strengths and good parts of Omron little by little over time. It doesn’t have to be right away. I always say to ECB people “1+1 should be equal to 3.” This is what I expect for all outputs and also what I expect from OPT. I think that by combining the strengths of the former Pioneer PMC with Omron’s we can truly make “1+1=3.”

The Omron Group’s LCD Backlight Unit (BLU) Business
Until now, Omron has been concentrating on BLUs that employ a point light source method for small-sized LCDs used in mobile phones. This method draws on Omron’s core light wave control technology and has many advantages such as low power consumption and the need for fewer parts. OPT (former Pioneer PMC), in contrast, has been developing small and medium-size multiple light source BLUs that are equipped with multiple LEDs.

Omron is striving to enhance its small-sized BLU range by adding OPT’s multiple light source products to its own point light source lineup so that the company can meet a diversity of customer needs in a timely manner. Omron also aims to expand its business in the field of medium-size BLUs for use in car navigation systems, laptop computers, game consoles and other devices with OPT’s product range. Combined with the large-size BLUs used in LCD TVs, which are now being developed by Tama Fine Opto, the Omron Group aims to become a world-class manufacturer of BLUs that cover all sizes from small to medium and large.


Overview of OPT

Company Name:	Omron Precision Technology Co., Ltd.
Business Lines:	Development, manufacture & marketing of small-sized LCD BLUs, rubber products and resin molding
Representative:	Chairman Yoshio Nakano President & CEO Isamu Horimoto
Capital:	448 million yen
Location:	Saitama prefecture, Japan
Number of employees:	Approx. 270 (Group: 1,570) (as of 1 July, 2006)
Consolidated Sales:	36.4 billion yen (for FY05)
Consolidated Subsidiaries:	In Japan: Omron Precision Technology Hokuriku Co., Ltd. Overseas: Hongkong (1), China (1), Republic of South Korea (1)