Market Insight

Japanese automation suppliers post strong financial results for 2017

July 27, 2018

Daisuke Muto Daisuke Muto Senior Analyst, Manufacturing Technology

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Key findings:

  • Japanese industrial automation suppliers settlement of accounts in 2017 show strong results
  • By industry sector and region, strong performers in 2017 included FPD / OLED related manufacturing in South Korea, smartphone manufacturing in China, electric vehicles and components - such as secondary batteries, and capital investment in semiconductor manufacturing equipment
  • Sales of servo motors, servo drives, and PLCs increased in 2017 driven by increasing automation of production facilities
  • Growing demand to automate and access production data, using IoT, also supported strong Japanese automation market performance
  • Projected higher sales revenue and earnings in 2018 is based on the current momentum, however, due to Yen appreciation against the US dollar, many Japanese companies have strictly set the exchange rates that they will use in 2018 compared with 2017

 

Japanese automation supplier performance strong in 2017 and forecast to remain strong in 2018

 

Results of Fiscal Year 2017 for industrial automation suppliers in Japan were good overall. Steady results for the domestic business were boosted by strong overseas markets.  Some bright spots in China included supply of automation for smart phone production, secondary batteries production for electric vehicles, and an increase in capital investment in semiconductor manufacturing equipment. In addition, the increasing automation of production facilities, driven by the rise in IIoT, also supported strong sales of automation from Japanese suppliers.

 

During the many discussions conducted by Manufacturing Technology analysts most Japanese automation suppliers mentioned that most parts of their business performed better in 2017 than in 2016.  Because of the strong demand in 2017 some servo / drive suppliers were struggling to meet demand, also because of problems sourcing components and semiconductors.  Most Japanese automation suppliers are now able to meet demand, with the component shortage having less of an impact on automation component production.

 

Most Japanese automation suppliers of servo motors and servo drives experienced increased sales in 2017.  Especially for motion control and robotics used in semiconductor manufacturing equipment, and other applications requiring precise motion, 2017 was a very good year.  Production lines for servo products are at full capacity for a lot of leading Japanese suppliers. Some suppliers are even investing in new capacity.  For instance, Mitsubishi Electric plans to increase manufacturing capacity of AC servo products to 480,000 units per month.  Similarly, Yaskawa Electric plans to expand production of AC Servo products in China as well as establishing a new robotics factory in Slovenia.

 

In 2018 Japanese companies will be closely monitoring exchange rate fluctuations.  In response to the Yen's appreciation during the second half of 2017, Japanese automation suppliers set strict exchange rate conditions for their business planning in 2018. Those companies that export a large percentage of production are likely to be affected by currency changes versus the US dollar.  Changing commodity prices and increasing crude oil prices will also be highly scrutinised, in terms of impact on machinery/automation investment.

 

Geography
Japan
Research by Market
Manufacturing Technology
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