Aichi Steel's Sensor Business Self-Destructed
A brother company of Toyota Motor Corporation neglected the advancement of technology
and withered the "money making tree".
October 2020 DEEP

Four years ago in 2016, Aichi Steel as a member of the Toyota Group had already been ahead of the"Nissan Carlos Ghosn incident" in criminally suing and arresting their former technology executives forstealing and leaking sensor technology embedded in smartphones. If the company had the technology to
do so, people may think that they are splendidly developing and making sensor business, but in fact thatis not the case. From the process of the trial, it seems that the important thing of large-sized transaction
annihilation is repaired by "the case". The IT market, where there is no such thing as " Keretsu" as amanufacturer that has stopped technological progress, is relentlessly severe.
According to an IT industry official familiar with smartphone technology trends, the start of the downhill
was a conflict of internal business policies over the delivery of sensors to Apple.
Aichi Steel Co., Ltd., which mainly manufactures forged products such as crankshafts for automobiles, hasentered the small sensor market with MI sensors, which is indispensable for the electronic compass
function of smartphones. Since it has a reputation for being suitable for measuring geomagnetic field,orders began to come in from smartphone manufacturers such as LG in South Korea, ASUS in Taiwan,
Nokia in Finland and in 2012 years, Apple, the leader of the smartphone industry, finally offered to deliver
it to iPhone6.

"Dissolution" of Sensor Subsidiary (AMI)
Here, In order to meet Apple's demands, Yoshinobu Honkura, who was the managing director of thecompany’s MI Sensor business and technology at the time (currently the defendant of the criminal case),
insisted on building a mass production line and developing a better sensor to deal with the weak point ofMI sensor. However, Company top executives at the time kicked Apple and dismissed Mr. Honkura fromthe board in June 2012. In the sensor business, the company decided to narrow down its own production
and instead leave production and sales to Rohm, which has a brand name in the electronic components
industry, to convert it into a business model that earns licensing fees.
Mr. Honkura launched MagneDesign co., Ltd. in September 2012 with his own hands, aiming to developa sensor that is 100 times better than the MI sensor. At the end of 2014, he succeeded in prototyping a
new sensor element. In November of the following year, the confirmed GSR effect on the element wasrecognized as a patent, and he succeeded in developing GSR sensor, with different principles and methods
than MI sensor.
The difference between the two is that the MI sensor detects a change in the impedance of the wire, while
the GSR sensor detects the spin rotation of magnetization on the most surface of the wire. The way tomake it is different and the opposite, whereas the MI sensor tensions the wire as loose as possible,
whereas the GSR sensor puts on a strong tension above the elastic limit to ensure the effect. As anyengineer knows, it is impossible to make something that is 100 times better in the world of electronic
components from the same principle.

On the other hand, Aichi Steel, which steered the licensing business, re-challenged Apple with sensors
jointly developed with Rohm, but it did not work. According to an IT industry official, "Apple strongly
wants to improve the performance of its parts every time it comes out with a new smartphone. they only
associate with places where are willing to develop technology."
As a result, the sensor business of Aichi Steel was found by reading the "Research and Development
Activities" section of the securities report, but the momentum was lost. The description of the licensing
business with ROHM was listed in the fiscal years ended March 31, 2015 and March 31, 2016, but hasdisappeared since the fiscal year ended March 31, 2017. Instead, "We are developing a magnetic lane
guide system for projects within autonomous driving of the Cabinet Office SIP" and "We succeeded indeveloping a sensor module with built-in ball of baseball rotation analysis system in collaboration with ageneral sports equipment manufacturer." It is aimed at the field where the demand is extremely limited,
and the description about the business where a lump sum quantity comes out like for the smartphone isnot found. Aichi Micro Intelligent, a subsidiary of Aichi Steel Co., Ltd., which handles MI sensor-related
products, was dissolved at the end of June 2020.

The Honkura patent is judged to be "effective"
From this background, Mr. Honkura's GSR sensor has not been commercialized yet, no matter how you
think about it, Aichi Steel’s sensor business is "self-destruction". but Aichi Steel (1) Criminal charges forconspiring with subordinates in August 2016 to illegally acquire, use, and disclose the trade secrets of
Aichi Steel (2) Patents for magnetic wire alignment and heat treatment equipment acquired by Mr.
Honkura through GSR sensor development in December 2016 are patent rights claiming to have used thetrade secrets of Aichi Steel. Filed a provisional disposition order prohibiting disposition (3) In January 17
seeking damages of 1.5 billion yen for illegally disclosing and using Aichi Steel's trade secrets and filed aprovisional disposition order (4) In September 18 the Patent Office filed a patent invalidation trial on Mr.
Honkura's GSR sensor. claimed, and set up quickly.
Only when Mr. Honkura was arrested in February 2017, The mass media of Japan making a big fuss andafter that is lurking, so little is being said about what happened to each incident, but the current situationand the results are as follows.
First, the two men were not charged with criminal charges in (1). However, the two have been arrested,charged, and tried on a second charge for illegally disclosing trade secrets to equipment manufacturers.
As for (2), the Nagoya District Court decided to provisional disposition, but Aichi Steel withsed the appeal
in February 2020 and settled it. (3) The lawsuit for damages was finally filed by Aichi Steel three years
after the provisional disposition decision, and the trial will begin this fall. (4) The patent invalidity trial
request was rejected and Mr. Honkura's GSR sensor patent was found to be valid.
In addition, Mr. Honkura's paper on GSR sensor technology has been published in Sensors, the mostprestigious international journal in the sensor field, and JMMM, the most prestigious in the field ofmagnetic materials.
However, in the criminal trial going on in the Nagoya District Court, it is called a problem that Mr. Honkura
wrote "magnet" on the whiteboard when he ordered an equipment to manufacturer the element hepatented from an equipment company. "because it is a trade secret that Aichi Steel kept in the cabinet".
a magnet is used to secure the amorphous wire that sticks to the —— If a large company manages theknow-how that even elementary school students seem to be able to think of in a cabinet, it becomes atrade secret.
The company which worked to improve the performance of the sensor, entangled the inventor who
attracted attention from the world by the method of the branch and leaf, and convicted, and ruined thebusiness by sitting on the existing technology is relieved. This story is not funny in Japan which is going tothe science and technology-based country.