The company‘s European share of sales has nearly doubled in the past ten years, with automotive and industrial electronics forming the backbone of TDK‘s business in Europe.
Markt&Technik: There were certain expectations when Epcos was acquired by TDK ten years ago. Have those expectations been fulfilled?
Joachim Zichlarz: Looking back, we can very definitely speak of a success story, although I openly admit that the first one or two years were challenging. At the time, TDK and Epcos stepped up with the promise that one plus one would be more than two. That has turned out to be absolutely true, yes. But it is also true that combining two such large manufacturers from different parts of the world is a challenge.
As far as sales are concerned, you have certainly hit the target. Today, sales of about 10 billion euros make TDK the industry‘s number two player.
Yes. Ultimately, the combination was so successful because the overlaps between the two companies – in terms of both product portfolio and regional presence – were minimal. The industrial and automotive electronics business in Europe was attractive to TDK, while the information & communications and consumer electronics business in Asia was attractive to us. The absence of major overlaps means that, within the TDK Group, Germany today remains a very important base for development, production and sales. I would like to stress that TDK only ever drove integration where it was necessary and made sense. On the product front, Group sales in the fiscal year to March 2018 broke down into 33 percent from passive components, 35 percent from energy application products, 22 percent from magnetic application products, and 6 percent already from sensors. The remainder is spread across various minor activities.
The final step in the transformation came when the subsidiary Epcos AG was renamed TDK Electronics AG on October 1. Are there any other consequences from this move, beyond the change of name?
No. That was simply another step to reinforce the consistency of TDK‘s global market presence. The renaming does not affect how the company is organized or its business structure, and the product portfolio too remains unchanged. All other Epcos companies around the globe are also being renamed, along with Epcos AG. But because legal requirements vary from country to country, the renaming process will probably take nine to twelve months. So it should be finished by about the end of summer 2019.
What competencies does the former Epcos embody within the TDK Group today?
Our understanding of applications in the context of industrial and automotive electronics, obviously. Europe today contributes close to 1.6 billion dollars, or 13 percent of Group sales. Go back ten years and you find that Europe accounted for only 7 percent of TDK‘s sales. So we have succeeded in nearly doubling the European share of sales. The fact that today we are the go-to organization for everything to do with power electronics has certainly played a part in that. Throughout the company as a whole, we have genuinely been able to further strengthen our existing strengths! At the same time, IT infrastructures from Epcos have, for example, served as a blueprint for TDK’s introduction of SAP that began several years ago.