Section 1. Development of Diverse Vehicle Lineup and Expansion of Domestic Sales
Item 3. Expansion of Production Network and Establishment of Multi-kind, Small-lot Production
In-House Production of Electronic Components and Semiconductors at Hirose Plant
In the latter half of the 1980s, Toyota also began in-house production of car electronics, a field which was making rapid advances.
By 1985, 49.6 percent of the engines in Toyota vehicles incorporated electronic fuel injection technology. Marked advances had also been made in electronic control of components such as transmission and suspension systems. Fears had been raised at Toyota of a lack of knowledge of the inner workings of technology due to "black-boxing", if those electronic products were sourced from external suppliers, and in 1984 a policy was set to promote in-house research and development of electronic components. The first task Toyota set about tackling was in-house production of electronic control units (ECUs) used in power steering.
The organizational structure was also revised, with the merging of electronics related departments in February 1985 to form the Electronics Engineering Division, and the establishment of the Electronics Production Engineering Division in February 1986. For Toyota's first ECU, production lines and testing facilities were introduced at the company's Honsha Plant in 1985, with production beginning in November that year. In April 1986, facilities were transferred to the Teiho Plant and expanded, and production of ECUs for the Toyota Electronically Modulated Suspension (TEMS) system, first installed in Soarer models, commenced.
In addition to ECUs, in the latter half of 1986 the company began building a unified development and production system for ECUs, actuators (as drive system apparatuses) and sensors-all essential electronic components. This internalization became known within Toyota as "tenouchi-ka" or "keeping technology within our grasp". In addition to preventing such technologies from becoming an indecipherable "black box", when sourcing the same component from an external supplier, this internalization also allowed Toyota to correctly understand and evaluate a supplier's proposal, and to ensure that the cost and quality levels were appropriate.
In October 1986 the company decided to produce its semiconductors internally. At a Production Cross-Functional Meeting held in November, official approval was granted to construct the Hirose Plant as a specialized facility for semiconductors and electronic components, and the plant was completed in 1989. The Hirose Plant was constructed on 250,000 square meters of land that the company had attained in 1985 in the Nishihirose Industrial Park, spanning Toyota City and Fujioka-cho in Nishikamo-gun (now part of Toyota City).
Although Toyota made the decision to internalize its electronic component technology, the company's lack of experience in the semiconductor field led it to conclude a basic agreement with Toshiba in March 1987 for the introduction of technology. The agreement was wide-ranging, and covered construction of a semiconductor plant, technical cooperation related to design and production, as well as the dispatch of employees to provide technical guidance. In September 1988 the Micro Electronics (ME) Development Division was launched internally, and the ME Engineering Building was established on the Hirose Plant grounds for research and development into semiconductors. Construction of cleanroom facilities and the introduction of machinery followed, and in March 1989 the semiconductor plant was completed.
In preparation for the completion, from 1987 the company began receiving technical training and guidance from Toshiba, Nippondenso (now Denso) and Toyota Central Research & Development Laboratories for people assigned to the plant. This training facilitated the rapid start-up of production at the completed plant.
The Hirose Plant tackled the challenge of producing electronic components and semiconductors in-house, working with the attitude that "We won't gain technical competency unless we get our hands dirty during design and battle to establish production." This policy of keeping the company's electronics technology within its grasp supported Toyota's advanced technological capabilities during the race to develop safety and environmental vehicle technology that accelerated starting in the mid-1990s.