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FANUC (6954 JP) is a Japanese industrial automation company. Its product portfolio includes:
- Computer numerical control (CNC) systems. CNC devices are a type of computer used to program machine tools. FANUC has a global market share of 50% in this segment.
- Industrial robots. FANUC has gained market share in the industrial robot segment and now has a 20% global market share with industry-leading margins.
With weakening demographics and rising ages in countries such as China, companies such as Volkswagen and Apple are increasingly automating their production lines to improve quality control and productivity. The economic decoupling that’s taking place between China and the Western bloc could also spark the “near-shoring” of manufacturing capacity back to Europe and the Americas. Such an economic decoupling will necessitate investments in industrial automation tools.
The company is not necessarily a first-mover when it comes to technology. Instead, you can think of FANUC as the “Toyota of the industrial automation sector”. FANUC’s products are cheaper than its competitors, yet more reliable and with better service. FANUC’s products are highly standardised, improving the company’s ability to maintain quality control while keeping costs low. For example, one customer said that “FANUC robots simply do not break.”
A 2015 article in the Financial Times described FANUC as a “cult”, not unlike other highly successful organisations such as Samsung Electronics, Lululemon and Apple. In their own words:
“The clock [running 10x faster than normal] is not the only oddity about FANUC, a ruthlessly focused Japanese organisation that is run more like a cult than a normal company. Staff wear yellow, the favourite colour of FANUC's 89-year old founder Seieumon Inaba. The buildings are yellow and the on-site buses are yellow. Visitors are generally not welcome.”
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