Just as the company was achieving strong earnings with the relay calculator, a new wave of technological innovation arrived. An electronic calculator using newly invented transistors appeared in Great Britain, and Japanese manufacturers all rushed to make similar products. Electronic calculators were much faster than relay models, completely silent, and were even small enough to fit on top of a desk. With the arrival of this electronic model, sales of relay calculators fell dramatically, leaving a mountain of unsold inventory. Casio had done some research on transistor-based electronic calculators, but accustomed to strong sales of relay calculators, the company had fallen behind others in transistor development, and now found itself in the first crisis since its establishment.

When it was announced that newly developed relay calculators were intended to compete with electronic models, the dealers who were there insisted that the relay era was over and wanted to know why Casio was not coming out with an electronic model. After much internal debate, the company decided to exhibit a transistor model prototype that had been secretly developed. Even though the prototype still had wiring sticking out, it won overwhelmingly enthusiastic approval. From that day on, Casio put all its energy into electronic calculators, and Casioês first electronic product, the 001, was released in 1965. This product, with a memory function not found in competing calculators, was well received, and the companyês calculator business was back on the road to recovery.

Tadao and Toshio soon found themselves working all day on subcontracting work to make a living, and then spending their evening hours absorbed in developing the calculator. They showed the prototype to people and then made improvements after getting feedback, and in this way worked out the various problems and bugs in the invention. After making ten or more prototypes, they completed Japan's first electric calculator in 1954. The following year, the Kashio brothers proudly took their finished product to Bunshodo Corporation, the trading company handling office supplies, including calculators. Unfortunately, the Bunshodo representative told them that their calculator was out of date because it could not do continuing multiplication, wherein a multiplication product could be subsequently multiplied by another number.