2025.10.24
TDK’s Timeless Evolution: Corporate Culture and Value Creation Revealed Through Our Dialogue
(Center: CIO Yu Shimizu, at TDK Internal Event)
For nearly 90 years since its founding, TDK has continued to create new value by boldly transforming its core businesses in response to changing times. From ferrite to magnetic tapes, HDD magnetic heads, and now rechargeable batteries—the company’s evolution has always been driven by a unique corporate culture that underpins its strength - such as the spirit of “negative technology,” which questions the very essence of existing technologies without fear of challenge, and “functional equality,” which encourages open discussions that transcend hierarchy and titles. In this post, we introduce the driving forces behind TDK’s value creation and explore its future outlook through our ongoing dialogue with the company.
Overview
TDK Corporation (6762) was founded in 1935 by Kenzo Saito, with the goal of industrializing ferrite, a magnetic material invented by Dr. Yogoro Kato and Dr. Takeshi Takei of the Tokyo Institute of Technology. The company adopted its current name in 1983. Initially, TDK produced ferrite cores used for radio noise suppression, later expanding into capacitors and other electronic components. During the 1970s and 1980s, the company’s core business shifted to cassette and video tapes that applied its magnetic technologies. As digitalization progressed and demand for magnetic tapes declined, TDK pivoted to magnetic heads for hard disk drives (HDDs), which offset the shrinking tape market and became a new growth driver. In the 2010s, as HDD demand stagnated due to the growing storage capacity of semiconductor media such as NAND flash, TDK sustained growth by expanding its business in small rechargeable batteries for smartphones. This dynamic evolution—from cassette tapes to HDD heads, and then to smartphone batteries—illustrates TDK’s defining ability to adapt its core business in line with technological and societal change.
The company’s small rechargeable battery business is led by Amperex Technology Limited (ATL), a Hong Kong–based subsidiary. ATL was founded in 1999 by Robin Zeng, a former TDK engineer, and was acquired by TDK in 2005. Since then, ATL has expanded its small-battery business under the TDK umbrella, making a major contribution to strengthening the group’s energy segment. In 2011, ATL’s electric-vehicle (EV) battery division was spun off to form Contemporary Amperex Technology Co., Limited (CATL), which has since grown into the world’s largest EV battery manufacturer. Although TDK and ATL no longer have any capital relationship with CATL, and Mr. Zeng is no longer involved in ATL’s management, since 2021 the two companies have been collaborating in mid-sized batteries for electric two-wheelers and energy storage systems through cross-licensing and joint ventures.
Corporate Culture
TDK’s ability to boldly transform its core business in response to changing times stems from its technological capabilities and corporate culture. Founder Kenzo Saito had engaged in a variety of ventures—including pig farming and wool textiles—before establishing TDK, repeatedly experiencing both successes and withdrawals. The entrepreneurial spirit forged through these trials remains one of the company’s core values today. Another enduring strength is the company’s world-class research and development capability, tracing back to Dr. Kato and Dr. Takei, the inventors of ferrite.
Today, TDK promotes a flat corporate culture based on its principle of ‘functional equality,’ which encourages open idea exchange across roles rather than hierarchy. This philosophy fosters free and constructive discussion across the organization. Another expression of TDK’s innovative mindset is its concept of “negative technology.” This means deliberately questioning and re-examining existing technological assumptions to pursue differentiation and long-term innovation. The company’s strategic pivot from magnetic tapes to hard disks is a historical example of this mindset in action.
TDK is now focusing on developing advanced technologies that underpin the AI ecosystem, positioning them as potential future growth pillars. One such initiative involves analog memory devices utilizing magnetic technology, which could reduce AI device power consumption by up to 99%. Although this could eventually reduce demand for TDK’s core battery products, the company’s willingness to embrace potentially disruptive innovation demonstrates its open and forward-looking culture—one that prioritizes societal progress over short-term business preservation.
Rechargeable Battery Business
Today, TDK’s core business lies in the Energy Application Products segment centered on batteries, which accounted for 53% of total revenue in the fiscal year ended March 2025. The company commands an estimated 50–60% global market share in small rechargeable batteries used mainly in smartphones, and 10–15% in power supplies for industrial equipment—both among the highest in their respective markets.
In its key smartphone segment, the proliferation of edge AI is expected to drive demand for higher-capacity and higher-efficiency batteries. Indeed, the smartphone phone battery market is projected to grow at an annual rate exceeding 6% (1). Meanwhile, in the mid-sized battery field, demand from electric two-wheelers is forecast to grow by over 11% annually (2), and that from data centers by nearly 13% (3).
The broadening range of applications underscores the increasing indispensability of rechargeable batteries as a foundation for next-generation societies. As electricity consumption rises, the role of batteries in energy decentralization and supply–demand balancing becomes ever more critical. Through the production of high-capacity, high-quality batteries, TDK contributes meaningfully to the stability and sustainability of modern infrastructure.
Dialogue with Cadira Capital Management
We have been engaging actively with TDK since early 2025. In recent years, TDK has significantly strengthened its stakeholder engagement, particularly through its Investor Relations and Sustainability divisions. This has become increasingly visible since President Noboru Saito (no relation to founder Kenzo Saito) took office in 2022, accelerating organizational reforms and dialogue initiatives.
At an international conference in March 2025, our CIO Yu Shimizu delivered a presentation and TDK reached out to propose a follow-up discussion based on the content of the speech. The company expressed particular interest in our concept of Impact-Integrated Value (IIV). TDK has been exploring ways to demonstrate how non-financial capitals—such as human and intellectual capital—contribute to business growth and how this can be reflected in stakeholder evaluation and disclosure. Our approach provided concrete insights into this challenge.
After several rounds of meetings, we initiated an investment in TDK shares in July. In September, CIO Yu Shimizu joined a meeting involving TDK’s business divisions, offering a rare opportunity for direct exchange with operational leaders. It is uncommon for listed companies to proactively invite investors into internal discussions, and we viewed this as a positive sign of TDK’s strong confidence in its corporate culture and transparency.
Participating firsthand in these discussions, we observed TDK employees engaging openly and dynamically in dialogue, often discovering new perspectives through cross-functional exchange—an embodiment of the company’s “functional equality” in practice.
We hold high expectations that TDK will continue to advance its essential rechargeable battery business as a social infrastructure while contributing to the AI ecosystem through technological innovation. We intend to maintain constructive engagement with the company and accompany its journey toward long-term value creation.
(1) https://www.datamintelligence.com/research-report/cell-phone-battery-market
(2) https://www.wiseguyreports.com/reports/motorcycle-lithium-battery-market
(3) https://www.precedenceresearch.com/data-center-lithium-ion-battery-market
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