Chapter 7A Return to Innovation
15．Facing the Future, Questioning the PresentThe Hidden Risk of Dependence Beneath Stability
At the dawn of the 2010s, MegaChips stood out as a unique presence in Japan’s semiconductor industry. Twenty years had passed since Shindo founded the company in 1990 with what many at the time considered a reckless vision: operating without owning manufacturing facilities. While major semiconductor manufacturers struggled under the burden of heavy capital expenditures, MegaChips’ fabless business model delivered strong profitability and had firmly established itself as a successful and sustainable approach.
However, what occupied Shindo’s mind was not the exhilaration of success, but rather a profound sense of crisis. In 2011, Nintendo launched the Nintendo 3DS, and MegaChips had established an unshakable position as a key partner responsible for its core components. However, excessive dependence on a particular customer or market carries inherent vulnerabilities; once swept up by changes in the business environment, such success can collapse in an instant. ‘’Could our current success mark the beginning of future decline?”
Shindo continued to ask this question of himself and of the organization.
16．Shift Toward GlobalizationReigniting the Entrepreneurial Spirit and Declaring War on Big-Company Bureaucracy
Shindo strongly urged an organization to reignite entrepreneurial spirit. As the company grew larger, a more conservative mindset gradually began to emerge. Through his books and internal lectures, Shindo repeatedly emphasized that ‘‘the moment a venture company succeeds, the process of decline begins.’’ He accelerated the transformation of the company from a supplier that merely designs and sells semiconductors into a solution provider capable of solving customers’ problems at the algorithm level. Following the unprecedented Great East Japan Earthquake in 2011, as Japanese industries sought to strengthen their Business Continuity Planning (BCP), Shindo made the decision to accelerate the reconstruction of the company’s global supply chain and reduce its dependence on the domestic market.
17．Business Transformation and Expansion into New FieldsFrom Algorithm to Silicon: A Distinctive Development Philosophy
What Shindo emphasized once again was the company’s unique development philosophy: not merely designing chips, but developing algorithms that solve customers’ problems and then embedding them into silicon (semiconductors). This approach differentiated MegaChips from conventional semiconductor suppliers and became a cornerstone of its competitive advantage. The Great East Japan Earthquake of 2011 exposed the vulnerability of global supply chains. However, Shindo regarded the crisis as an opportunity to reassess the company’s management and business portfolio.
One of the key initiatives was to shift the business focus from ASICs, manufactured according to customer specifications, to ASSPs, where the company itself could create new markets and generate added value. In particular, MegaChips sought to leverage the image-processing technologies it had cultivated through years of supplying digital camera solutions and expand their applications into new areas such as surveillance cameras, automotive cameras, and medical equipment.
