Long-term Vision21
Copyright © 2016 Harmonic Drive Systems Inc.

Driving forth of our growth
Achieved highest
ever net sales(100 mil. yen)250

Net sales (non-consolidated)

Service robot
mobility, etc.
Leading-edge medical
equipment

200

Flat panel display
manufacturing equipment
150

Semiconductor
manufacturing equipment
100

Applications
driving growth50

0Industrial robots (further expand)

Machine tools'71'72'73'74'75'76'77'78'79'80'81'82'83'84'85'86'87'88'89'90'91'92'93'94'95'96'97'98'99'00'01'02'03'04'05'06'07'08'09'10'11'12'1314 15

Desired needs Large hollow
 Extreme flatness
 Extreme compactness
 High precision
 High torque, long life Extreme lightness
 Lower cost
 Stay on top of trends ofthe times, such as
Industry 4.0 and IoT(FY)

22Copyright © 2016 Harmonic Drive Systems Inc.

Global shipments of industrial robots
Industrial robot shipments in 2015: 239,000 (+8% YoY)

Source: IFR website

Main regions

Units sold in 2015

YoY change (%)

China

66,00016

Asia (other than China)

78,000-5Europe

50,0009North America (US, Canada, Mexico)

34,00011

Source: IFR website

23Copyright © 2016 Harmonic Drive Systems Inc.

Potential markets
・Rate of labor cost reduction due to rapid expansion of industrial robot use
・The more economically developed a country, the higher its labor costs, raising expectations
for robot introduction.
Rate of labor cost reduction due to rapid expansion of industrial robot use (2014 and 2025compared)(%, based on labor costs
after adjustment for productivity)

Note 1: China figures based on Yangtze River Delta region.
Sources: STAN Bilateral Trade Database, US Bureau of Labor Statistics, BCG analysis

24
Copyright © 2016 Harmonic Drive Systems Inc.

Robot classifications
Use

Requirements forspeed reducers

Industrial robot

Making things on thefactory floor, separated
from humans by safety
fenceHigh precision, highreliability, withsensing functions

Co-botOperating alongsidehuman workers, assisting
and collaborating

Medium-precision,
safety, acceleration
efficiency, impact
cushioning

Professional
robot

Medical, nursing care,rehabilitation, logistics,
resource extraction,
agriculture

Compact, lightweight, flat, highprecision

Consumer robot

Consumer electronics,
hobbies, toys

Low costTypeI. Industrial robot

II. Service robot

Source: IFR and KDDI Research Institute with our additions

25Copyright © 2016 Harmonic Drive Systems Inc.

LifeRobotics
Japanese co-bot maker
Picking co-bot with the “world’s simplest operation”
Growing introduction in diverse markets
Vehicles market

Toyota
Motor
Electronicequipment/device
marketRestaurantmarketYoshinoya

OmronFeatures of CORO® co-bot• Highly safe, using extensible armwith no elbow joints• Simple setting of actions by teaching• Same size operating space ashumans

From LifeRobotics website

Logistics market

Food production
marketLeadingJapanesecorporations

RoyalCosmetics market

Leading Japanese
corporations
26
Copyright © 2016 Harmonic Drive Systems Inc.

Realizing the long-term vision
Provision of platforms for sales, R&D, production
Platform provision
SalesProduction

50th anniversaryof founding

R&D¥50 bil.
（Sales forecasts）¥35 bil.
¥30 bil.
¥29 bil.

（Sales results）¥18.1 bil.

¥21 bil.

¥25.9 bil.

(¥28.2 bil.)Previous Mid-termManagement Plan
FY2012FY2014

New Mid-termManagement Plan
FY2015FY2017Long-term Vision

FY2018FY202027
Copyright © 2016 Harmonic Drive Systems Inc.

Sales: Expanding sales to Asian markets
Planning to establish sales agency in Taiwan■ Electronic parts, semiconductors, EMS and other industries are flourishingMarkets for robots, semiconductor manufacturing equipment, machine tools and otherfactory automation products are also expanding New robot companies, and makers of built-in EMS robots and collaborative robots,
are growing

SAMICK ADM Co., Ltd.
Harmonic Drive
Daegu
Systems (Shanghai)Co., Ltd.
Chongqing
ShenzenShanghaiHarmonic Drive Systems
Inc.

TaipeiTaiwan RepresentativeOfficeTaiwan Representative Office28
Copyright © 2016 Harmonic Drive Systems Inc.

Production capability: Expanding capacity
Completion of new plant building• Meet medium-term demand increases• Raise monthly production capacity from 50,000 to 80,000 units(Investment in machine tools and other equipment will be carried out inphases with an eye on demand trends.)• Introduce new production engineering to boost efficiency and quality
New plant building
Completed April 2016

29
Copyright © 2016 Harmonic Drive Systems Inc.

Research and Development: Total Motion Control
and Relation to New Core Technologies
Cloud

Big Data/ AI

FogThe concept of Total Motion Control
Software

ICTSensors

Speedreducers
MotorsControllersNewmaterials

Otherelements

IoT

Drivers

Power supply/ Charge
30
Copyright © 2016 Harmonic Drive Systems Inc.

Research and Development: Searching for new technologies andpreparing for expansion of applications
New research site planned for Silicon Valley• Search for new technologies, develop applications, gather information,and build relations with partners• Take advantage of U.S. subsidiary to station our staff
Latest technologies

AI
SoftwareIoT

ICT
Big Data
Excellent humanresources

New applications
and industries
Aviation

Space

Logistics

Healthcare

Personalmobility

IT firms

Universities

Venturefirms

Researchinstitutions

Investors31Copyright © 2016 Harmonic Drive Systems Inc.