artience2027, Medium-term Management Plan | Integrated Report 2025Technology and Intellectual Property Strategy: Maximizing utilization of resources both inside and outside the Group to open up new markets

Our Group’s strength lies in our core technologies of colorant and polymer design, dispersion, and coating, which we have cultivated over the course of many years; and in our ability to refine numerous applied technologies and apply them to a wide range of fields. While each technology or product itself may be small, we flexibly combine multiple technologies and products to build technology platforms that provide optimal solutions to our customers.

In the short to medium term, we will explore “spillover areas” that lie just outside the scope of existing technologies, to deliver products that meet market needs with a high degree of accuracy. At the same time, it is crucial for us to explore new areas with a long term perspective, and embrace challenges toward the next innovation. Through these actions, we drive the evolution of our platforms and create new value.

The semiconductor field is one of our strategic priority business areas. In particular, currently, the spread of generative AI is rapidly increasing demand for data centers. Our semiconductor polymers are beginning to be adopted as a low-dielectric base material for pattern formation, and we aim to expand further in this growing market. In addition, the adoption of insulating materials for electronic devices is progressing. We will strengthen our efforts to expand into areas with higher volume potential, such as smartphones, while building deeper relationships of trust with customers.

In the battery field, we will continue to focus on carbon nanotube (CNT) dispersions for lithium-ion batteries (LiBs) while accelerating our efforts to address all-solid-state batteries, which are expected to become popular in the future. Although these are still in the pilot stage, we have already received inquiries. We believe it is important to establish our market position through early entry, before all-solid-state batteries are put into practical use.

Another area that we are prioritizing as a next-generation market is HAI (Human-Agent interaction.) AI is now evolving beyond a tool for calculation and reasoning to a technology that deepens relationships with humans and understands emotions and intentions. In this area, we are conducting joint research with Nihon University’s College of Humanities and Sciences, and in FY2024 we announced the HAI experiential content Tomonigo™. We are exploring the possibilities of a future in which people and AI agents complement each other and spend time together.

Responding to environmental regulations is also essential. In addition to developing products that make use of recyclable single materials and biomass materials, and products that don’t require solvents, we are also working on a new curing system for LED-UV curing inks. LED-UV curing inks are subject to strict regulations in Europe, due to concerns that the substances generated during curing may have an impact on the environment, and on human health. We are developing safe and reliable LED-UV curing inks that meet these requirements using a new technology with a different mechanism from existing ones, and aim to bring them to market.

We are also strengthening our efforts to utilize generative AI. The Generative AI Utilization Promotion Task Force, established in FY2025, is attempting to train generative AI using approximately 30 years of experimental research data, and is also exploring ways to combine this with publicly available academic papers and patent information. The aim is to build a system that can present optimal ideas and solutions in response to questions, enabling employees to solve problems that were previously handled individually by leveraging all kinds of knowledge from both inside and outside the company.

In intellectual property activities, we have also been working to automate patent searches and patent application document creation using generative AI. While in the past we have filed numerous detailed patents to protect our technologies, going forward we will strategically acquire patents that can serve as sales tools by identifying patent gaps based on competitors’ movements.

Based on the major assumption that the development of new technologies is built on numerous failures, the Group’s R&D division has introduced a system called “20% Free Exploration Activities.” Members can freely allocate 20% of their working hours to themes based on their own interests. In these activities, failure is not a problem, and achievements are evaluated and recognized appropriately. In FY2025, we have also established the “R&D Challenge Award” to reward the innovative spirit of our employees and teams.

In response to the many employees in technical development positions who wish to pursue their expertise over the course of a long career, we have also introduced a “Specialist System.” By providing management-level treatment to employees in specialist roles, we aim to develop highly skilled engineers who are widely recognized in the industry.

As we continue to enhance our competitiveness in the market, the importance of value that resonates with the senses continues to grow. Can we provide products that move the hearts and minds of end users, and evoke surprise and emotion? Can we exceed the expectations of our customers with whom we have daily interactions, and deliver technical proposals that excite them? And can the employees responsible for technical development approach their work with a sense of excitement? It is only by dedicating ourselves to what we truly want to do, rather than simply performing routine tasks, that we can achieve results beyond our imagination. We believe that engineers should have the opportunity to share the technologies they develop with the world, and to experience the life-changing sense of accomplishment that comes with it. We will continue striving for this, and aiming to create a virtuous cycle of further business expansion and corporate growth as a result.

Structure for the development of technologies that lead to the development of future businesses