YASKAWA Electric : Business Promotion

At a Glance

The Yaskawa Group deploys the technology and knowhow of the highest global standards to its products and services through business activities in the three core business segments of Motion Control, Robotics and System Engineering.

MOTION CONTROL

・AC servo & controller business

AC servo motors are incorporated in produc- tio n equipmen t for electronic parts, semiconductor products, etc., that require high precision.

AC servo Σ-X series

・Drives business	AC drives are used in
social infrastructure, such
	as HVAC, escalators and
	elevators, and contribute
	to energy-saving.

Yaskawa AC drive	Matrix converter	PM motor
new series	U1000

ROBOTICS

・Arc and spot welding robots ・Painting robots

・Handling robots

・Clean/vacuum transfer robots for semiconductor and LCD manufacturing equipment

Our main product is vertical articulated robots, which contribute

to automation of weld- ing, painting, assembly and transportation at production sites in various fields, mainly in the automotive market.

Robot controller	Arc-welding robot	Collaborative robot
YRC1000	MOTOMAN-AR1730	MOTOMAN-HC20DT

SYSTEM ENGINEERING

・Social system business ・Environment & energy

business

・Industrial automation drive business

Our advanced technological capabilities in system engineering and electrical products contribute to the automation and stable operation of steel plants, water treatment plants and large crane equipment, and to the expansion of the use of renewable energy in environmental energy markets such as photovoltaic power generation and large-scale wind power generation.

Generator and	Medium-voltage	PV inverter
converter for large-	matrix converter
scale wind turbines

55 YASKAWA Report 2021

Business Model	Vision and Strategy	Management Capitals	Corporate Governance	Business Promotion	Financial and Corporate
Information

Market Share (Company estimate)

AC servo drives

17%

(Global)

Market Share (Company estimate)

AC drives

6%

(Global)

Breakdown of Revenue by Region in FY2020

Asian Countries except China

13%

China
29%	FY2020
	176.0
	billion yen
EMEA

10%

Japan

26%

The Americas

22%

Net Sales/Revenue, Operating Profit, Operating Profit Ratio*

(Billions of yen)						（%）
250							25
	212.0	213.2
200	172.0			180.4	176.0	20
	19.7
150						15
			16.3	11.4	14.0
100	13.2						10
50	22.7	41.7	34.6	20.5	24.5	5
0	2016	2017		2018	2019	2020 (FY)	0

Net sales/Revenue (Left axis)

Operating profit (Left axis)

Operating profit ratio (Right axis)

Market Share (Company estimate)

Industrial robot

12%

(Global)

Breakdown of Revenue
by Region in FY2020
Asian Countries except China
13%
		Japan
China		27%
FY2020
28%
139.4	The Americas
	billion yen	12%

EMEA

20%

Net Sales/Revenue, Operating Profit, Operating Profit Ratio*

(Billions of yen)				（%）
200			177.9		15
		163.3
160			152.1	12
139.9
	10.9	10.1		139.4
120				9
80	7.3				6
					5.0
40				4.3	3
	17.7	17.9
	10.2	6.5	6.9
0					0
	2016	2017	2018	2019	2020 (FY)

Net sales/Revenue (Left axis)

Operating profit (Left axis)

Operating profit ratio (Right axis)

Market Share (Company estimate)

Steel plant systems (Blast furnace)

100%

(Japan)

Breakdown of Revenue
by Region in FY2020
Asian Countries except China
2%
China		Japan
9%
FY2020	65%
EMEA	50.7
19%	billion yen
The Americas

5%

Net Sales/Revenue, Operating Profit, Operating Profit Ratio*

(Billions of yen)					（%）
60	59.3	52.9		55.5		12
	51.6	50.7
40						8
20						4
0	-0.5	-3.7	-0.7	0.4	-1.0
			0.8	-2	0
	-1.0		-1.5
-20				-4
-40	-7.2				-8
			2019	2020
	2016	2017	2018	(FY)

Net sales/Revenue (Left axis) Operating profit (Left axis) Operating profit ratio (Right axis)

• Results up to FY2017 are based on Japanese GAAP, and results after FY2018 are based on International Financial Reporting Standards (IFRS.)

YASKAWA Report 2021 56

Business Strategy

MOTION CONTROL

・AC Servo & Controller Business

Enhancing machine performance as major components incorporated in production equipment

Revenue Breakdown by Application（FY2020 Results）

Other

(Packaging, textile, injection molding, etc.)

Approx. 30%

Electronics-related industries including semiconductor, FPD and electronic components

Approx. 40 %

Machinery-related industries including machine tool, metal processing, press machine and robots

Approx. 30 %

Role of AC Servo Drives in Manufacturing DX

In the manufacturing industry, it is important to collect, analyze and utilize various data from equipment in order to improve manufacturing productivity. AC servo drive is a key component for driving the various devices used in manufacturing. By using AC servo drive, which controls the motion of equipment, as a sensor and acquiring various data from the equipment, we can provide new added

value to manufacturing sites, such as preventive maintenance of equipment and improvement of production quality. The Σ -X series, which was launched in March 2021, not only offers the industry's best motion perfor- mance, but also enhances the ability to utilize sensing data, thereby contributing to the enhancement of added value of customers from the manufacturing site.

FY2020 Results and FY2021 Plans

In FY2020, in addition to growth in revenue due to increased demand in China for new infrastructure- related products such as 5G and new energy, robust global demand for capital investment in the semiconductor and electronic components markets such as smartphones and data centers contributed to robust sales.

The Σ-X series of AC servo drive was launched in March 2021. In FY2021, we will continue to further evolve "i3-Mechatronics" solution capabilities and expand the range of components that respond to the changes in production systems. Through these efforts, we aim to build a highly profitable structure.

57 YASKAWA Report 2021

Business Model		Vision and Strategy		Management Capitals		Corporate Governance		Business Promotion		Financial and Corporate
					Information

SWOT Analysis of Business

Strengths：Strengths of Our Business and		Weaknesses：Challenges
			Differentiation		• Speed-up of the process from development to mass
• Developed the world's first "minertia motor" which is the		production
	prototype of the current servo motor in 1958		• Reinforcement of production response to rapid changes in
			World-class performance and quality		demand
			Brand value as global No.1 market share		• Evolution from component sales to sales of integrated
• Hold strong relationships of trust with leading companies		solutions
	in various manufacturing equipment
			Contributing to the advancement and performance of
			machines through the pursuit of leading-edge technologies
Opportunities：Business Opportunities		Threats：Business Risks
• Growing demand for industrial automation		• Supply chain disruptions associated with geopolitical risks
• Industry sophistication, including 5G, IoT, and
	• Pricing strategies by manufacturers in emerging
	autonomous-driving
		countries
					• Emergence of an actuator that can surpass the motor in
					performance and have the potential to replace the motor

"Challenge 25 Plus" (FY2019 - FY2022) Goals

Establish a global No.1 position as a leading company by further evolving "i3-Mechatronics" solution capabilities and expanding the range of components that respond to the changes in production systems, and by building a highly profitable structure

	Progress on the "Challenge 25 Plus"	FY2022 Financial Targets
	Progress of Measures
	Development:	Revenue:	221.0
	• Accelerate development of strategic products that realize "i3-Mechatronics"
		billion yen
	Production:		:
	• Deployment of the YASKAWA Solution Factory concept to overseas produc-
	Operating profit 43.7
	tion sites		billion yen
	Sales:	Operating profit ratio:
	• Launch of the Σ-X series of AC servo drive to increase customer value with
		19.8%
	the industry's best motion performance and digital data solution
	• Strengthen relationships with customers and create sales opportunities	*Motion Control segment
	through top-level sales activities
	Improved profitability:
	• Improving productivity in indirect operations through the application of the
	latest production methods

YASKAWA Report 2021 58

Business Strategy

MOTION CONTROL

・AC Drive Business

Contributing to sustainable development of society and industry by realizing energy-saving and higher performance of machinery through optimum motor control

Revenue Breakdown by Application（FY2020 Results）

General-purpose machinery / Other

(Textile machinery, metal processing machinery, packaging machinery, conveyors, etc.)

Approx. 61%

Oil & gas

Approx. 2 %

Air-conditioning systems for buildings (HVAC) and compressors

Approx. 16 %

Cranes and hoists

Approx. 9 %

Pumps and fans

Approx. 7 %

Elevators

Approx. 5%

Role of AC Drives in Society and Industry

AC drive is a device that can continuously change the motor rotation speed by converting the voltage and frequency of the power supply. The use of AC drive makes advanced motor control possible, while at the same time contributing to energy conservation by operating only as much as nec- essary. AC drive may be widely applied to machinery and equipment in which motors are used, and the market size is estimated to reach 1.5 trillion yen worldwide. In the past,

drivers of market growth for AC drives were (1) the advancement of electrification accompanying the advancement of industry, and (2) the rise of emerging economies. Recently, however, as part of efforts to realize sustainability in each country, attention has been focused once again on the energy conservation effects of using AC drive. AC drive is increasing its presence as an indispensable device for the sustainable development of society and industry.

FY2020 Results and FY2021 Plans

FY2020 was a tough year. In particular, the prolonged slump in the U.S. oil and gas market caused by the sharp decline in crude oil prices hurt revenue. In order to establish a business structure that is less susceptible to fluctuations in specific markets, we are working to realize the "Vision 2025" by accelerating the expansion of applications (HVAC, fans, pumps, etc.) that emphasize energy-saving

performance.

We expect demand to recover in FY2021. Since March 2021, orders have been increasing rapidly on a global basis, and revenue is expected to be capped by production capacity as well as a shortage of parts due to the global economic recovery. We will strive to maximize revenue by preparing to provide customers with the

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