Japan's 4th Industrial Revolution Secret Weapon... Industry Robot World No.1 'Fanuc' [Hidden Industry Story]

Industrial Robot Market Share 21%
World's No.1 Robot Company Japan's Fanuc
"Versatility is a Gentleman’s Disgrace" Under This Belief
Focusing on R&D Instead of Overexpansion

Operating Fanuc industrial robot. / Photo by Fanuc America YouTube capture

[Asia Economy Reporter Lim Juhyung] The smooth aluminum frames of smartphones and the detailed exteriors of cars are all products of advanced mechanical engineering. To create rounded metal edges, aluminum must be precisely cut, polished, and drilled, processes that cannot be performed by human hands.

Today, the aluminum processing process is handled by robotic arms called 'machine tools,' and among the machine tools deployed in factories worldwide, a staggering 80% are provided by the Japanese robotics company FANUC. This is why FANUC is regarded as the "secret weapon of Japan's 4th Industrial Revolution." Without FANUC's robots, establishing advanced manufacturing plants is simply impossible.

◆ World's No.1 Industrial Robot Company 'FANUC'

FANUC holds 21% of the global industrial robot market, making it the world's leading robotics company. Among these, it commands an 80% market share in 'cutting machines' that carve smartphone aluminum frames, and a 60% share in numerically controlled machine tools that produce various items based on input commands, effectively holding a near-monopoly position.

Global IT companies also rely on FANUC's robotic technology. Apple and Foxconn have introduced 100,000 FANUC cutting robots in iPhone production factories, and Samsung Electronics has purchased nearly 20,000 units.

Consequently, FANUC's revenue from the robotics industry is enormous. In the fiscal year 2018, FANUC's sales reached 726.6 billion yen (approximately 7.9324 trillion KRW), with a net profit of 182.4 billion yen (1.9912 trillion KRW). Manufacturing companies typically have an average operating profit margin of only 5-8%, but FANUC achieved profits exceeding 25% of sales. Holding a dominant position with almost no competitors in the market, there is no need for price-cutting or destructive competition.

Fanuc factory located at the foot of Mount Fuji in Japan. Fanuc keeps all its core factories in Japan to prevent technology leakage. / Photo by Fanuc website

◆ Thorough R&D... Factory Built at the Foot of a Mountain to Prevent Technology Leakage

FANUC's competitiveness as a leader in the robotics market stems from its unparalleled technological prowess. The company's founder, Honorary Chairman Seiichiro Inaba, also holds a doctoral degree and comes from a research background.

In particular, Chairman Inaba has persistently emphasized FANUC's research and development (R&D). It is known that FANUC spent over 56 billion yen (approximately 611 billion KRW) on R&D last year alone, and one-third of its more than 7,800 employees are researchers. FANUC is expanding its research network not only in Japan but also by establishing the 'FANUC Berkeley Laboratory' in California, USA.

To prevent technology leaks, FANUC employees are reportedly not allowed to exchange emails with outsiders, and even internal communication between departments is conducted only via fax. Concerned about the overseas leakage of robot manufacturing know-how, FANUC has thoroughly prioritized security over cost savings by locating all its factories at the foot of Mount Fuji in Japan.

However, the treatment of engineers is exceptional. FANUC's average annual salary is about 13 million yen (approximately 142 million KRW), nearly double the average salary of 7 million yen (approximately 76.4 million KRW) at large Japanese companies. The company also guarantees top-tier welfare benefits and de facto lifetime employment for its employees.

◆ "Jack of all trades is a gentleman's shame"... Honorary Chairman Inaba's Management Philosophy Driving FANUC's Growth

Honorary Chairman Inaba Seiueimon standing in front of a Fanuc machine. / Photo by Twitter Capture

Honorary Chairman Inaba's 'single-minded strategy' is also the secret behind FANUC's rise as a global robotics company.

Since his days at the Japanese electronics manufacturer Fujitsu, Inaba has devoted himself exclusively to industrial robot research. Under his leadership, Fujitsu developed Japan's first computer numerical control (CNC) machine tool in 1956. Recognized for his achievements, Inaba was appointed to lead FANUC, then a venture within Fujitsu.

FANUC separated from its parent company Fujitsu in 1972 to focus solely on computer control technology and the robotics industry. Over the following 48 years, it concentrated exclusively on robot development, becoming the world's number one industrial robot company.

Throughout his management, Honorary Chairman Inaba never attempted to acquire other businesses or enter new markets, avoiding distractions. Instead, he focused solely on research and development of machine tools to grow the company.

Even today, a sign in FANUC's headquarters meeting room reads, "Jack of all trades is a gentleman's shame." Rather than diversifying like typical conglomerates, FANUC's motto reflects its dedication to robotics and the lifelong commitment of Honorary Chairman Inaba to a "robot-only" path.

Meanwhile, Honorary Chairman Inaba handed over the CEO position to his son, Chairman Yoshiharu Inaba, in 2013 and stepped down from management after 41 years. He passed away on the 2nd (local time) due to old age at the age of 94.