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Introduction to Furukawa AVC Electronics (Suzhou)

1.

INTRODUCTION

Furukawa AVC Electronics (Suzhou), hereinafter called
FAZ, that constitutes a core business base for theoverseas expansion of the Electronics Components
Division (hereinafter called ELC) of Furukawa Electric, will
be introduced in this report.
FAZ started operation three years ago in Suzhou inChina, a beautiful city often called a Venice of the Orient.
Suzhou is also enjoying the world's top-ranked positionin terms of receiving foreign investments including, e.g.,a number of personal computer manufacturers that rush
into the Center China and East China on an OEM or ODM
basis.

2.

FAZ AND ITS PRODUCTS

FAZ is currently producing two mainstay products of ELC:
reflow furnaces for high-density surface mounting andcooling heatsinks for CPUs that are used in computers,
personal computers, game machines and digital home
appliances. The reflow furnaces of FAZ are provided withstate-of-the-art functions such as high-density mounting
and environment-friendly Pb-free soldering, thus receivinga high reputation from our customers all over the world.
On the other hand, the heatsinks of FAZ feature theuse of heatpipes which are 80 times more efficient thancopper in terms of thermal conductivity. With its productdevelopment abilities as well as its strict quality control
based on the integrated production system from raw
material to finished product, the capabilities of FAZ havebeen appreciated by all the customers in the world.
Both the high-density mounting and heatpipe technologies, which constitute the core technologies of reflow furnaces and heatsinks, respectively, have been fostered in
the Yokohama Laboratory, the R&D center of FurukawaElectric, and have been developed into the new businesses. Today, supported by the strength of the material technologies, they are expected to grow up into the mainstay
businesses of the company.
FAZ was founded three years ago through joint capital investment between ELC and Taiwan AVC, a worldfamous manufacturer of CPU coolers. ELC and Taiwan
AVC have been in a cooperative relationship for sometime considering each other as a strategic business partner, and FAZ is a successful result of this alliance.

3.

BUSINESS POLICY OF FAZ

To be consistent with the business policy of ELC, FAZ has
been promoting, since its foundation, local procurement
and building up of local business infrastructuresuch as evaluation technology and management
technology. Although embarrassed by the different
social and business cultures, we tenaciously establishedcooperative relationships with local vendors, thus
succeeding in delivering the first reflow furnace madein China in only one year after the business start. With
respect to the heatsink, the time from the planning to thefirst delivery was shortened to three months.
The deployment to the new factory (the current 1stFactory of FAZ), which was prepared in consideration offuture development, was a good example of our business

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policy of “speedy judgment, speedy decision and speedy
action.” There is an interesting story that the people in
the neighborhood were surprised to see the new factory began to deliver the products on the next day of themove.
During the production line expansion at the new factory,
innovations were introduced avoiding simple imitation.
Manufacturing machines made in Japan were evaded fortheir expensiveness in addition to time-consuming delivery and maintenance. Thus efforts were made either topurchase locally made machines through careful studies
or to assemble in-house the machines themselves using
local components and local component manufacturers. In this way we were able to furnish the line with thenew machines at a low cost which is one third to one
tenth in expense and about one half in time compared toJapanese machines. We can not deny that these locallymade machines are somewhat inferior to Japanesemachines in terms of user-friendliness, inducing us toimprove the dies and jigs together with the method ofmaintenance such as checking spot and frequency. But
this led us to train ourselves to constantly review andimprove the production lines including the dies structures, line configuration, maintenance routines, personnel
allocation, etc.
Basically our production lines do not use belt conveyers which may require intensive studies on the process quality control, cycle time balance, reduction ofin-process inventory, line speed and bringing-up of multiskilled workers. Since the production process in the newfactory is comprised of many unit processes, the layoutof the production line can be easily changed. Throughsuch efforts to construct a flexible as well as compact
production line, we have achieved a productivity ratio
per unit area as high as three times that of the averaged
local companies of the same industry. Some of the visiting customers that we receive practically every week say,in particular when they are from Western countries andthey are used to visit huge OEM factories in Taiwan, thatthey feel uneasy to see our compact production lines
reduced to about one third the extent of ordinary factories and that they are anxious to know our true capacity
deploying in such a limited space. Although they always
reach a comprehensive understanding of what “Japanesecompactness” is, it is true that we are urgently required
to secure a sufficient production capacity. To meet sucha requirement, in June 2004 we completed the construction of the 2nd Factory for exclusive use of heatsinks inthe neighborhood of the 1st Factory, in order to cope withthe production volume that continues to double every halfyear.
With respect to quality control and production management, we made efforts to achieve their true objectives rather than importing the Japanese management
technology as it now stands, whereby we rigorously
educated the employees about the basics while we tried
to be flexible and impromptu about actual application. In
these activities, the dispatched staff members strived toachieve direct communications with the local members
using the local tongue that they learned intensively. We
are proud to say that it is their behavior that improved thespeed and quality of these activities. Traditionally ELC
has a fabless business section, in which they have muchexperience, on regular basis, in building up productionof new products employing an entirely new consignment
manufacturer. This may be the reason why they haveacquired the habit of putting the business resources athand to practical use in a way that is TPO adapted, situation dependent and timely.
Currently the education programs of design and evaluation have been actively expanded, resulting in the delivery of developed products that were designed and manufactured in China. Hereafter, we plan to accelerate thedevelopment thus expanding the targeted area.
With regard to local purchasing, the suppliers' plants
are gathered around FAZ's premises so that we are readyfor attaining higher level of production and quality control, thus implementing the SCM (supply-chain management) system steadily. When it comes to heatsink, key
components are being manufactured in the same premises consistently enabling efficient production throughmutual exchange of information on production and quality. Moreover, the improvement of logistics began to exert
its effect. Accordingly, it can be said that we are near tocompletion of a business foothold that is provided with all
the necessary functions including developmental design,component purchasing, production, logistics and customer service. Targeting at “FAZ as No. 1,” we are making
efforts in Suzhou to win the race with any competitors inthe same business in the world.

µHPSalamanderµHP-HS

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4.

CONCLUSIONSWith its business core based on ELC and AVC, FAZ
intends to grow up into a business foothold in China for
Furukawa Electric and other Divisions. We appreciate
your continuing support for our activities.

[Outline of the Company]
Company name:

Furukawa AVC Electronics(Suzhou) Co., Ltd.
Date of foundation:May, 2002
Capital:
5 million US$
Number of employees: 599
Business line:1) High-performance su r f a c emounting reflow oven
“Salamander”
2) Micro heatpipe “µHP”
3) Heatsink with micro heatpipe“µHP-HS”
Location:
1st Factory: Fuxing Street, Suzhou
Industrial Park, Suzhou 215121
China
2 n d Fa c t o r y : C 1 , C 2 P u t i a n
Industrial Park, Weiting Town,Suzhou 215121 China
President:
Takamitsu Kozuka
Point of Contact:+86-512-6271-3191, ext: 1110
Manager:
Li Qiang Quo

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