Thin-screen televisions employing LCD or plasma displays became widespread in the early 2000s, and Hitachi, Company D, and Company E were the market leaders in plasma displays.
Hitachi High-Technologies received a procurement request from Hitachi for back covers for thinscreen plasma televisions. They decided to enter the back cover business in collaboration with Company F, a mold machining company based in Nara Prefecture. The launch of terrestrial digital TV broadcasting in Japan in 2002 created rising opportunities. Market demand expanded rapidly as consumers replaced their old TV sets with thin-screen televisions, and supplies of back covers were insufficient to meet demand. This created an obstacle to Hitachi’s efforts to increase production of thin-screen televisions.
Hitachi High-Technologies devised a plan to create an efficient mass production system by supplying eight large-format press machines and robots to Company F. Under the business model they devised Hitachi High-Technologies would assume the capital investment costs, lend the equipment to Company F, and recover the depreciation costs from customers. This investment decision was an excellent example of then-President Hayashi’s “added value business model.”
Subsequently, in 2004, Japanese television manufacturers including Hitachi and Company E called for a globalization of manufacturing facilities and cost price reductions. Hitachi High-Technologies, in collaboration with the American affiliate of Company F and Chinese suppliers, made an additional investment and further loans of equipment and robots. In this way they helped to support the television business of Japanese manufacturers in North America and China from behind the scenes.