Partners and friendly rivals; enabling sustainable growth through collaboration.
Oxford Instruments plc. (headquartered in England, UK), hereinafter Oxford Instruments) was founded in 1959 as a successful technology company spun off from the University of Oxford in the UK. The company supports its customers in addressing some of the world’s most pressing challenges, enabling a greener, healthier, more connected, advanced society for all. The company offers a variety of advanced technology products ranging from research and development to manufacturing processes, quality control, and analysis, including cryogen-free dilution refrigerators and superconducting magnets for condensed matter physics research, elemental analysis systems for electron microscopes, laser and optical imaging systems, and deposition and etching systems using plasma technology for semiconductor fabrication processing at atomic level.
In 2019, ULVAC commenced the sale of Oxford Instruments’ plasma atomic layer deposition (ALD) systems for mass production solution for gallium nitride (GaN) power devices and also their next-generation atomic layer etching (ALE) system in Japan.
We spoke with Dr. Ian Barkshire online.
Dr. Ian Barkshire, CEO, Oxford Instruments plc.
Setsuo Iwashita, President and CEO, ULVAC, Inc.
- Growing markets to capture.
- Management Strategy, HORIZON
- Company culture for Sustainable Growth
１. Growing markets to capture
Iwashita ： Oxford Instruments (hereinafter referred to as “Oxford Instruments”) and ULVAC, Inc. started to build strategic business collaboration since 2019, and the team has achieved major advancement since then. Dr. Barkshire provided insights on how Oxford Instruments is rapidly growing and capturing business opportunities during this time of drastic change.
This interview was conducted online due to limitations of traveling by COVID-19, however I would like to extend my sincere appreciation to you. I am excited to hear your views on various issues today. We would like to know your views on how a company should be and how it can grow with the fast changes we face.
Barkshire ： Thank you very much indeed, Iwashita-san. I would just like to say how pleased I am to be able to join this conference call with you today. It’s a great pleasure, especially given the progress our teams have been making over the last year.
Iwashita ： Thank you. Yes. And it’s true. The UK and Japan, we are two countries worlds apart. I think it is important for us to exchange market views and our philosophy of management. We are facing new challenges. The market is growing, and we are competitors, but we are partners at the same time. We can collaborate with each other.
Barkshire ： I totally agree. Personally, I passionately believe that as technology advances more quickly, our customers’ demands will continue to grow. It is important that through the development of our respective core technologies, we can deliver increased value to our customers. We can do so by collaborating to reach new customers and by developing our technologies more quickly. This should create a great advantage for both of our organizations.
Iwashita ： So in the East Asia in both semiconductor and electronics areas, we understand that from the customer’s voice, almost all our customers now they are very happy because they receive the biggest order ever happen in the past. And this will keep growing. So that’s why now it’s the right time we both companies work together and try to expand our business.
Barkshire ： So whilst this creates great opportunities, I think it also creates new challenges. Challenges around operations, lead times and supply chains, but also in how we can effectively reach and engage with our customers. This is why strategic partners present such a benefit. A few carefully selected, strategic partners that can help us rapidly grow together so that we can both continue to be successful.
Iwashita ： In which market is Oxford Instruments especially focused ?
Barkshire ： At Oxford Instruments, we have specialized technologies that span three key areas: the ability to analyze and characterize materials, imaging and characterization within life science, and also our semiconductor expertise. We provide key capabilities across a number of important markets such as power electronics, life science, battery technologies, and in a broad range of material science areas including quantum technologies, which may revolutionize many industries. In life science, we’re helping people in gene therapies and new drug diagnosis, we’re indirectly involved in number of cancer trials by providing the ability to image, analyze and understand the fundamental mechanisms of diseases. We are involved with pharmaceutical and life science research all around the globe with the leading institutes and industrial companies. In the semiconductor arena, our analysis and imaging capabilities are used broadly by all of the leading high volume manufacturing companies. And our semiconductor processing tools, very much like ULVAC, are used across applied R&D, but also increasingly in high volume manufacturing for energy and data communication applications.
２. Management Strategy, the HORIZON
Iwashita ： I understand that now you’re conducting Horizon, a transformational program in your group company. Can you tell us something about the Horizon? What is the future target?
Barkshire ： Our Horizon Strategy is all about delivering on the inherent potential within Oxford Instruments. We have been transforming our company into a customer-centric, market-driven group where all of our efforts are focused on the needs and demands of our customers today and their future requirements. This has involved developing stronger commercial teams to better understand the needs and requirements of our chosen end markets. We’ve also focused the group into a number of niche technologies where we can provide leadership and create significant value for our customers. This has provided a lot of synergies and innovation. We’ve been investing in R&D so that we can create sustained technical differentiation in our chosen market and create even more value for our end customers. Through Horizon we have worked to deliver sustainable long-term revenue growth, but also to significantly improve the performance and quality of our business, which we recognize as the operating margin. Over the last five years since the implementation of the Horizon strategy, we’ve increased the operating margin from around 12% to 18%. As a technology company and based on the capabilities that we have within the organization, our ambition is to increase our margins to around 20%.
Iwashita ： Very good. Very challenging target. Yes. So along with your world business strategy, how do you value the Japan market? How important this market is to you?
Barkshire ： We think of all markets as important. If you look at our global revenues, we have roughly a quarter in the US, a quarter in Europe, a quarter in China, and a quarter in the rest of Asia. Oxford Instruments has always had a strong and proud relationship with our customers in Japan across a number of end applications. That’s why we’ve had a direct sales and marketing team there for many years. We see Japan as a leading market for new technologies, and advanced companies.
Continued on next issue.(two-part series)