Reinventing Manufacturing: Production Engineering for an Era of Co-Creation

The practical deployment of advanced technologies such as AI and next-generation medicine cannot be achieved by R&D departments alone. For rapid and high-quality implementation in society, technological advancement in the development of equipment for mass-production is essential.

At the heart of equipment development within the Panasonic Group is the Manufacturing Innovation Division of the Technology Sector at Panasonic Holdings Corporation. This spring, the Technology Sector established Technology CUBE—a core hub for research and development—in Kadoma City, Osaka Prefecture, Japan. Centered on intra-Group collaboration and external co-creation, the Manufacturing Innovation Division is transforming its manufacturing approach from a self-contained model to an open process, aiming to strengthen its ability to respond to increasingly complex market needs. In this article, Panasonic Newsroom Global spoke with key people from the Manufacturing Innovation Division about the evolution of these initiatives and the strategic direction ahead.

Equipment development for mass production, the advancement of underlying elemental technologies, and quality assurance—these areas, collectively known as production engineering, have long served as the backbone of manufacturing at companies. They are central to launching mass-production lines.

Within the Panasonic Group, the Mechanical Department at the Central Laboratory has been responsible for production engineering development since the 1950s, developing and deploying equipment that supported the mass production of black-and-white televisions and batteries. In the 1960s, the Group established Japan’s first dedicated production engineering laboratory in a private company, and the scope of development expanded from individual pieces of equipment to line integration and system-level solutions.

In the 1970s, the Production Engineering Division was established to lead the development and deployment of new process technologies, manufacturing equipment, and materials for priority products.

“It typically takes about five years for production equipment to be updated after a technological breakthrough, and it is difficult for individual business divisions to continue equipment development on their own during that period. That is why the Production Engineering Division was established for the purpose of developing production engineering,” explains Toshihiro Matsumoto, Head of the Manufacturing Innovation Division, Technology Sector, at Panasonic Holdings Corporation.

From 1998 to around 2010, Matsumoto worked on the fuel cell project in the Production Engineering Division. He led efforts spanning from structural design of fuel cell stacks^*1 to the development of mass-production equipment and completed the first unit for large-scale demonstration in 2005. Then the Division worked through multiple rounds to achieve cost reductions. These efforts culminated in the commercial launch of the world’s first residential fuel cell system, “ENE-FARM,” in 2009.

*1. Fuel cell stack: A device formed by stacking multiple fuel cells, the units that generate electricity, into a single assembly.

Meanwhile, as the environment surrounding products and markets began to shift, the conventional strategy of the Production Engineering Division—focusing on priority products—gradually came under review. The turning point came around 2010. “Simply making products smaller, thinner, and lighter was no longer sufficient to maintain competitive advantage,” Matsumoto recalls of that period.

In this environment, the Manufacturing Innovation Division was established in 2018. That was a result of an evolutionary reorganization of the Production Engineering Division, which had been focused on productivity and efficiency, into an organization whose primary purpose is driving innovation. The name of the newly created Manufacturing Innovation Division reflects its dual commitment to manufacturing capability and innovation capacity. Guided by the “Technology Future Vision”^*2 set forth by the Panasonic Holdings Technology Sector, it charted a new course: reexamining and reinventing the potential of manufacturing from a societal perspective.

*2. Technology Future Vision: A framework formulated by the Panasonic Holdings Technology Sector in 2024, defining the desired state of society in 2040 and the direction of R&D efforts to achieve that vision.

As a team of engineers deeply versed in production engineering, the Manufacturing Innovation Division is currently working to strengthen the competitiveness of businesses across the Group. The Division is also working on developing production equipment solutions for customers outside the Group, aiming to create new value for society.

The foundation for this value creation is the production engineering platform. It encompasses a wide range of technologies including materials (inorganic and organic), film formation, precision machining, measurement and inspection, electronic assembly, resource recycling, AI and data analytics, simulation and CAE^*3, molding, mechatronics, and bio-manufacturing. Rather than treating each technology in isolation, these technologies are combined to create novel production equipment solutions.

*3. CAE (Computer-Aided Engineering): A technology that uses computers to simulate and analyze physical phenomena such as structural strength, heat, and fluid dynamics in product design.

One of the successfully commercialized solutions is industrial inkjet printing equipment that automates the manufacturing of organic light-emitting diode (OLED) displays. This was achieved by combining the Manufacturing Innovation Division’s thin-film deposition and mechatronics engineering. The technology is also expected to find future applications in perovskite solar cells—a promising next-generation photovoltaic technology.

Furthermore, with the aim of contributing to the medical and biotechnology fields, the Manufacturing Innovation Division is currently focusing development efforts on a system for differentiating and culturing therapeutic cells. By combining bio-manufacturing with AI and data analytics, simulation and CAE, mechatronics, and measurement and inspection technologies, this system automates the entire process from generation of iPS cells to differentiation into T-cells. This enables high-quality, low-cost, and stable production of therapeutic cells, helping advance the widespread adoption of personalized regenerative medicine.

The Manufacturing Innovation Division’s ambitions are expanding into cross-Group initiatives. A prime example is semiconductor manufacturing equipment for AI chips currently being co-developed with Panasonic Connect Co., Ltd. (hereafter Panasonic Connect), with an eye toward commercialization.

As generative AI proliferates and semiconductor performance advances, improving power efficiency and ensuring reliability have become critical challenges. As such, advanced packaging technology—which achieves high-density bonding between semiconductor chips—has attracted growing attention in recent years.

In particular, 3D stacking technology—which bonds chips vertically rather than horizontally as in conventional approaches—has drawn interest for its ability to shorten inter-chip wiring and reduce power loss. However, achieving 3D stacking requires advanced techniques such as hybrid bonding, which directly bonds copper wiring and insulating films with high precision in a single process, making mass production a formidable challenge.

In response, the Manufacturing Innovation Division was able to establish a path toward practical implementation of the equipment at an early stage by combining its own production equipment assets with hybrid bonding technology from Panasonic Connect.

A distinguishing feature of the semiconductor manufacturing equipment for AI is its ability to provide a total solution that covers not only the hybrid bonding process, but also front-end and back-end processes.

“In conventional semiconductor manufacturing, different manufacturers’ equipment is typically used for front-end and back-end processes. However, because the Manufacturing Innovation Division had equipment for both front-end and back-end processes, it was able to leverage that strength to provide a total solution,” says Matsumoto, describing this as a distinct advantage that is unique to the Panasonic Group.

What the Manufacturing Innovation Division ultimately seeks through these initiatives is a social framework that reconciles environmental considerations and human well-being with the creation of economic value. “When environmentally responsible choices come with real economic value, people are empowered to be more confident and creative as they actively make decisions,” says Matsumoto.

Toward that vision, the Manufacturing Innovation Division is advancing a fundamental transformation of manufacturing itself. First, shifting from just consuming human talent and resources to regenerating and amplifying the value of people and resources through practices such as reuse. Second, shifting from a self-contained, in-house waterfall model to a process that adapts flexibly to change by embracing external collaboration and concurrent workflows. Third, shifting from the uniform mass supply of goods to delivering optimized solutions for specific applications and use cases.

Beyond these transformations lies the vision of a circular economy, where the creation and regeneration of goods is shared across society as a whole. Individuals, local communities, and regions each play their part, connected through networks of logistics and information, allowing value to circulate. “It is, in essence, a participatory manufacturing society,” says Matsumoto.

Furthermore, physical AI^*4 is also being considered as a key technology to support this transformation. The aim is to enable easier switching of production to suit different applications by enhancing the flexibility of equipment control, realizing manufacturing that is resilient to change.

*4. Physical AI: AI that perceives the physical world through sensors and uses that understanding to learn from and intelligently control robotic behavior.

Set to begin full operations this spring in Kadoma City, Osaka Prefecture, Technology CUBE is a new core research and development hub designed to support more open and concurrent evolution in manufacturing.

By bringing together organizations under the Panasonic Holdings Technology Sector—including the Manufacturing Innovation Division—communication and coordination between research, development, prototyping, and mass-production design are significantly improved. Involvement of production engineering from the earliest stages of planning helps to reduce rework, improve implementation quality, and help enhance both the implementation capabilities and speed of research and development.

But the role of this new facility extends beyond that. As a “hub for co-creation,” it will promote open innovation through joint experiments with external parties, prototype development, working groups, workshops, demonstration events, and more.

“Rather than keeping production engineering confined within the Group, we at the Manufacturing Innovation Division aim to accelerate the creation of new value through co-creation activities at this new facility. At the same time, by opening up production engineering, we intend to proactively generate early demand and shape the market for production equipment solutions,” says Matsumoto, sharing his vision.

Creating value for society through co-creation—the Manufacturing Innovation Division is redefining manufacturing as an adaptive and ever-evolving process to meet the demands of our changing world. Guided by the principles of open and collaborative production engineering, the Division is striving to help bring about a brighter future.