PANASONIC CORP's full extent of quality violations, which have been going on for over 40 years, about 5,200 products are involved, with the violations being 'exported' to overseas factories.

The report contained candid testimonies from employees at the scene involved in quality irregularities.

PANASONIC CORP, a major electronics manufacturer, is shaken by quality irregularities. PANASONIC CORP's subsidiary electronic component company, PANASONIC INDUSTRY (PANAINDA), released a report from an external investigation committee on November 1.

Approximately 5,200 product numbers were involved in the irregularities. This ballooned to over 33 times from the previously announced 153 product numbers in July. Irregularities were discovered in some form at 40 of PANAINDA's 55 domestic and overseas locations. Some irregularities had been concealed for over 40 years since the 1980s.

PANASONIC CORP manufactures electronic components used in a wide range of products such as home appliances, smartphones, PCs, and automobiles. The impact has spread to over 4,000 customers who purchased electronic components and materials from the company, and the investigation is ongoing.

With a revenue of approximately 1 trillion yen (fiscal year 2023) and employing 100,000 employees, PANASONIC CORP is a leading electronic components manufacturer and one of the core business companies in the PANASONIC group. What on earth has been happening at the company that was supposed to support Japan's manufacturing?

The trigger for the detection of misconduct was feedback from customers. When the performance evaluation of a certain Electronic Component was conducted by the customer, it was revealed that it did not meet the required specifications. Upon investigation by PANASONIC CORP, it was discovered that the product was shipped without reporting to the customer, despite knowing it did not meet the specifications.

In response, PANASONIC CORP established an internal investigation team in October 2023 and began a comprehensive inspection. In November 2023, irregularities related to the certification by the American Insurance Safety Testing Organization (UL) came to light. Subsequently, from January 2024 onwards, an external investigation committee was set up to further investigate and analyze the causes.

Among the 93 identified misconduct cases, the investigation report reveals that a wide range of quality misconduct related to various products has been carried out at various domestic and overseas locations over an extended period.

For instance, at the Yokkaichi and Minami Yokkaichi factories in Mie Prefecture, quality misconduct regarding molding materials and encapsulation materials has been ongoing since the 1980s. Molding materials are resin materials used for Automobiles and electronics components, while encapsulation materials are resin materials used to cover semiconductor devices.

These products were manufactured and shipped claiming to have received UL certification, an American product safety standard. However, it was found that 60 item numbers of molding materials and 43 item numbers of encapsulation materials were produced using material compositions different from those at the time the UL certification was obtained.

Among these, 15 item numbers of molding materials and 22 item numbers of encapsulation materials did not meet the flame retardant grade required by UL certification. Changing the material composition would require chemical composition analysis and combustion tests, but due to reasons such as 'to shorten the development period' (investigation report), necessary tests and approval processes were omitted.

Misconduct continues to cascade. In order to prevent the above misconduct from being uncovered, the Yokaichi and Minami Yokaichi factories were engaged in misconduct during regular inspections by certification bodies.

Specifically, inspections conducted once every 3 months by UL factory inspection personnel involved submitting products with different part numbers or special samples for submission. This was to hide the fact that when the flame retardancy of the designated part number specified by UL did not meet the standard.

Such methods to avoid the discovery of misconduct spread to overseas factories as well. At the Ayutthaya factory in Thailand, they were manufacturing and selling products made of copper-clad laminates for PCB materials that were different from the formulation registered for UL certification.

According to the investigation report, around 2013, a manual was created for the manufacturing process of special samples to pass inspections from certification bodies under the guidance of the Japanese expatriate at the time.

Cases have been confirmed where the exchange of special samples to pass regular inspections between domestic and overseas locations and the sharing of manufacturing methods were requested in order to pass audits. It is evident that misconduct aimed at concealing misconduct has spread across borders.

Furthermore, falsification and tampering of data submitted to customers have been carried out, and even top executives of subsidiaries have become involved in covering up the misconduct.