The world’s stock of industrial robots has tripled in the past decade. Japan furnishes 45% of new ones each year
The world’s stock of industrial robots has tripled in the past decade. According to the International Federation of Robotics, a trade group, Japan furnishes 45% of new ones each year. It also produces lots of other automation equipment, from laser sensors to inspection kit. Even after the recent sell-off in tech stocks, Japan’s four standout gear producers—Keyence, Fanuc,, and Lasertec—are collectively worth two and a half times what they were five years ago .
It is no surprise that Japan, a famously robot-loving place, has spawned a strong Automation Inc. Just-in-time manufacturing, pioneered by efficiency-obsessed Japanese companies such as Toyota in carmaking or Panasonic in consumer electronics, has involved replacing humans with machines for decades. This source of competitive advantage became an existential necessity for domestic manufacturers after Japan’s working-age population began to shrink in the 1990s.
, which sells pneumatic control devices to chipmakers, has seen its business boom, especially as places including America and Europe strive to bring more’s board. Lasertec enjoys a near-monopoly on inspection tools for the most advanced semiconductor photomasks—plates through which circuit patterns are etched onto silicon wafers. Its share price has ballooned four-fold since the start of 2020, making it one of the best-performing blue-chip stocks in Asia.
The companies’ devices are, of course, also handy in other sectors. Fanuc, which makes large factory-floor robotic arms, has long been a fixture of car assembly lines. Mike Cicco, who runs Fanuc’s American operations, notes that the development of electric cars requires a range of new capabilities on the part of carmakers—and that in turn necessitates new types of robot.
Being indispensable has proved to be lucrative. All four stars of Japan’s automation-industrial complex boast operating-profit margins of over 20%. That of Keyence, the most profitable of the lot, exceeds 50%. The firm has reported record net profits in each of the past three quarters. Like chip firms such as Nvidia, Keyence does not manufacture products but rather designs them and assists customers in deploying them in their factories. Lasertec, too, does little of its own manufacturing.
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