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It had been a bold move. When Masaru Ibuka and Akio Morita decided to go into transistors, Totsuko had been in business a mere six years. Though quite well-known in the tape recorder field, the company was still capitalized at under 100 million yen. Embarking on such an uncertain venture, Totsuko in
vested funds and effort on a scale almost unthinkable for a company of its small size. In asking company advisor Junshiro Bandai to serve as chairman of the board, and appointing another advisor, Michiharu Tajima, as auditor, Totsuko's management showed their resolve to consolidate and be ready for action.
The transistor project cost money. To raise funds for research and development, Toshiro Sakota, head of Totsuko's Accounting Department, went to the Credit Division of the Mitsui Bank (the present Sakura Bank). The bank was openly skeptical, saying, "These transistors, they're just substitutes for
vacuum tubes, aren't they?" In postwar parlance, "substitute" meant a stopgap imitation made to fill a shortage of the genuine article. For instance, staple fiber and rayon were considered substitutes for cotton and silk respectively. No matter how many assurances the bank was given that this product was entirely different from a vacuum tube, the distinction fell on deaf ears. Finally the accountant had to bring Ibuka along to do the talking.
Ibuka's explanation was extremely reasonable: "Any action is accompa
nied by friction. Friction wears away the material. This wear causes breakdowns. In the transistor, the action involves no moving parts. A transistor achieves the same effect as a vacuum tube through molecular changes. Therefore, it is trouble-free. A transistor is a great deal smaller than a vacuum tube, with a simpler structure and solid build. It is a completely different proposition." He held them spellbound for nearly three hours and managed at last to win the Credit Division over.
The plant investment alone was a large commitment. An alloy-type junction transistor was ready about the time Kazuo Iwama returned from the U.S. Once work reached this point, it was past the stage of basic research; now the target was a transistor for use in radios. This was a problem of a
different order. Aiming for a transistor that would operate at higher frequencies (ie., the grown type), they began making the devices they would need if they were to replace their semi-manual operations which relied partiallyon human skill - the pulling, wrapping, and so on- with an automated process for greater precision.
While Iwama and his team were working like men possessed on developing a transistor suitable for radios, the Totsuko sign was going up in the far-off Tohoku region. The Sendai plant opened for business. This was a full-scale plant which made metal contacts, ferrite, and other magnetic materials which were essential to the electronics industry. The first G-type tape recorder, marketed by Totsuko in 1950, had lost much material from theerasing head, and this was holding back any improvement in its performance.Ibuka's people looked into using ferrite, a magnetic materialwith good high-frequency characteristics, to manufacture the head. In 1951 they began a joint research project with Tohoku University's Okamura Laboratory, a pioneer of ferrite research in Japan. Totsuko sent Masaaki Morita, Akio's younger brother, to work with Professor Toshihiko Okamura, while in their own laboratory Iwama's team continued to develop the ferrite head.
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The H-type tape recorder, a successor to the G-type model, used the new ferrite head, giving better performance stability. The production curve continued to rise with the P-, R-, and subsequent types. The decision to move the ferrite production to Sendai was made in 1953, when tape recorder sales had begun to climb steadily. The ferrite for use in transformers had been perfected, and research on carrier ferrite was also nearing completion.
In those days, the Miyagi prefectural government actively encouraged factories to locate there. It was part of a grand scheme to create an industrial belt, known as the Senen Industrial Area, extending from the war-devastated city of Sendai, with its consumer-oriented economy, to the fishing port of Shiogama. From Totsuko's point of view, the conditions there were ideal. The greatest advantage was its proximity to Tohoku University, with whose scientists the company had collaborated closely in joint research projects on ferrite, tape, etc. Other factors behind the move to Sendai were the ample supply of electricity, for which there were few large industrial users as yet in the Tohoku area (the supply in Tokyo was extremely inadequate), and the fact that Totsuko's main Gotenyama plant was outgrowing its capacity due to the increasing production quantity of tape recorders.The new plant manager was Akinori Takasaki. A Tohoku University expert on powder metallurgy, Takasaki was begged to accept the job by Ibuka and Morita.
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