Why Japan’s Automation Inc is indispensable to global industry

SHORTAGES ANDSMC bottlenecks have been a source of constant frustration for manufacturers around the world for two pandemic-afflicted years. For a handful of companies in the business of keeping factories running and supply chains intact, these frustrations have been a source of cheer—and profits. Japanese makers of industrial equipment, in particular, have seen orders surge as companies turned to automation, first amid the disruption wrought on human workforces by covid-19, then as a result of tight labour markets and rising wage costs.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 (see chart). Last year the founder of Keyence, Takizaki Takemitsu, briefly became Japan’s richest man. His $29bn fortune is half as large again as that of , a flamboyant tech investor who is corporate Japan’s most globally recognisable face. Mr Takizaki’s firm and its fellow equipment-makers are hardly household names. But the hardware they produce is becoming as mission-critical to many industrial supply chains as semiconductors are.