Investment Guide to Tohoku

AIS Corporation:Aomori Prefecture

The Start of the FDP Industry at the Northermost Tip of Japan's Main Island

The natural environment is severe at Rokkasho Village in Aomori Prefecture. Throughout the year, cold winds blow through the village. In September 2000, a new kind of "wind" swept through the village when AIS Corporation was born. The company was the first enterprise to be established based on the Aomori Prefecture Crystal Valley Concept that the prefectural government formulated to integrate the liquid crystal industry into the Mutsu-Ogawara Industrial Development Area. Now, after five years, the winds blowing in Aomori are favorable enough to push the company up onto the world stage.

President Toshiro Hanada

Three Obligations of AIS

The career of Mr. Hanada, President of AIS, is unique in the field of senior management. He started as an officer in the Commerce and Industry, Tourism, and Labor Department of the Aomori Prefectural Government and then transferred to a private company, ANDES Electric Co., Ltd. in 1997. Mr. Hanada said, "I am a native of Aomori Prefecture. One reason why I transferred to a private company from the prefectural government was that I wanted to encourage industrial and regional development in Aomori. The other is that I made it my duty to revive the Mutsu-Ogawara Industrial Development Area, a project started with the support of the national government in 1969, to make efforts so that people living in the area clustered with petroleum and nuclear fuel plants can lead their lives safely and confortably. and to entice technology-based enterprises to the region." He has not changed his mind.

While he was at Andes Electric, he noticed the existing state of the liquid crystal industry that had grown up as one of Japan’s unique industries. Although Japan has shared about 85% of the overseas market for the past five years, some Asian countries such as Korea and Taiwan are on the rise with progressive changes in the financial environment and increases in overseas production capacity. "We had to break the situation somehow." His frustration was shared by everyone engaged in the liquid crystal industry. Says Mr. Hanada, "The vast Mutsu-Ogawara Industrial Development Area has the advantage of a stable supply of power and a low frequency of lightning strikes, and is suitable as the basis for the flat panel display (FPD) (note1) industry. In order to move the project forward and promote employment, together with Mr. Yasuda, the President of Andes Electric, I urged the prefectural government, the Ministry of Economy, Trade, and Industry, the Ministry of Land, Infrastructure, and Transport, and the Japan Federation of Economic Organizations to establish a basis from which we could develop a liquid crystal industry in the region." At last, in April 2000, their efforts resulted in the organization of the first meeting of the Reviewing Committee on the Crystal Valley Concept, with the purpose of promoting research and development of FPD, including wide-screen FPD, through industry-academia-government collaboration.

Mutsu-Ogawara Industrial Development Area in Aomori Prefecture (Photo: prefectural government)

(note1)FPD (flat panel displays)
FPD are flat and thin displays. Compared to cathode ray tubes (CRT), FPD are thin and can save space. They are therefore ideally suited to the limited space in houses and offices in Japan.

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The Crystal Valley Concept and the Mass-Production System for Color Filters

When Aomori embarked on the Crystal Valley Concept, Mr. Hanada did not imagine that his company would participate in it. He confessed, "From the position of a third party, I expected that some major manufacturers of household electric appliances such as Sharp and Hitachi would be invited to Aomori." However, in the year before the formal announcement of the concept, he was suddenly requested to pick out which panel manufacturers would be invited. At the same time, because of the rapid progress in color display technology for mobile phones, ANDES Electric had been requested to increase production of color filters by their clients.

Mr. Hanada said, "Even if we had enlarged the plant, we would not have been able to cope with the requested increase in demand of five to six times our potential output at the time. In order to solve two difficult problems: the request from the prefectural government to select enterprises to invite to the region, and the request from clients to increase the production of color filters, we had no choice but to establish a new plant in Rokkasho Village through joint contributions by several related companies." The prefectural government also speeded up their establishment of preferential systems, including custom-made factories for lease, subsidies for establishing enterprises related to the FPD(note1) field, and subsidies for establishing enterprises related to information technology. In particular, the custom-made factories for lease system, whereby both the factories and the equipment needed were made available, had the advantage of reducing initial investment figures by a large margin. In making his efforts to fulfill the expectations of the prefectural government, Mr. Hanada visited various companies including major panel manufacturers and material suppliers to establish a new company. At last, in September 2000, AIS Corporation was founded with joint contributions from six companies, Casio Computer Co., Ltd., Alps Electric Co., Ltd., Seiko Instruments Inc., Hitachi Chemical Co., Ltd., ANDES Electric Co., Ltd., and ANDES Intec Co., Ltd. In February 2001, Aomori Prefecture announced their Crystal Valley Concept to the world. AIS was the first company to be established in Rokkasho Village.

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Innovation and Motivation Produced through Cooperation between industry-academia-government collaboration.

Eighty-five percent of color filters manufactured by AIS are used in overseas mobile phones. Since color filters, which are key devices in mobile phones, are manufactured only in Japan, the plant operates 24 hours every day. The largest advantage that AIS has is a system in which the flow of business from planning through to marketing is carried out in cooperation with the six investors, who include a manufacturer of liquid crystal panels, a materials supplier, and a manufacturer of color filters. Mr. Hanada said, "The market for color filters will further expand into the BRICs (Brazil, Russia, India, and China).

AIS has 273 employees, including 252 natives of the prefecture (as of September 2004). Mr. Hanada said, "I don’t think of AIS as my company, but as a company for employees and customers, with me taking overall responsibility."

The manufacturing industry, especially for electronic parts, needs to have sufficient capability to win out over the severe international competition. Mr. Hanada says emphatically, "In order to decide on the future course of management in the globalized environment, enterprises from outside the prefecture should be invited in and integrated into Aomori through collaboration with major companies from various types of industries and at every business level. The Mutsu-Ogawara Industrial Development Area that is promoting the Crystal Valley Concept has abundant resources, including water, air, and electric power, and has infinite potential. A successful collaboration between the municipality and companies can be achieved in the region."

A clear policy on what is to be manufactured and what goals are to be pursued based on industry-academia-government collaboration is necessary to entice enterprises to the region. AIS has opened the door to achieving the clearly-stated goals of Aomori Prefecture’s Crystal Valley Concept.

External inspection. After printing the RGB (red, green, and blue) pixels and protective transparent electrode film onto the glass board, visual inspection is carried out with a variety of light sources.

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Covered, Dec 2004

URL of AIS Corporation: "http://www.aisinc.co.jp" (Japanese only)