Future Outlook

Copyright © 2016 Harmonic Drive Systems Inc.

Realizing our Long-Term Vision
Provision of platforms for sales, R&D, and production
Platform provision(100 mil. yen)50th anniversary of founding

Production
network

Sales(Actual net sales)(Target net sales)
210

181

259

290

500

R&D

350

300（282）
Previous Mid-termManagement Plan
FY2012FY2014Current Mid-termManagement Plan
FY2015FY2017Long-Term Vision

FY2018FY202025
Copyright © 2016 Harmonic Drive Systems Inc.

Sales: Trends in Main Application Fields (1)Industrial robots•Provide high added value (load capacity, speed)

Fusion of robots with AI and big data (IoT)
Handle welding, heavy
lifting, high-precisiontasks

Advances in sensors
enabling application toflexible manufacturing

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Sales: Trends in Main Application Fields (2)Co-bots••

Low added value tasks

Expanding collaboration between people and robots
Replacing people with robots

Collaboration between people and robots
Typical usage areas••••

Car manufacturing
Manufacturing ofelectronicequipment anddevices
Food service
industry
Manufacturing ofcosmetics,
pharmaceuticals,and foodHome appliance manufacturer
examples：Robots replacing people for cellproduction

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Sales: Trends in Main Application Fields (3)Semiconductor manufacturing
equipment••

On the way to the trillion-sensor
era

Expansion of investment in 3D (stacked) semiconductors
Acceleration of development of latest miniaturization techniques

Semiconductor manufacturing
equipment(100 millionsensors)

1,600

World outlook for sensor demand(quantity)
1,522

1,200913
800

53240002014

2020

2025

Source: JEITA (Japan Electronics & Information Technology Industries Association)

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Sales: Trends in Main Application Fields (4)Other• In-vehicle• Space• Medical equipment
In-vehicle

Communication Satellites

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Sales (Asian Market)
Taiwan Representative Office established■ 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 manufacturers, and makers of built-in EMS robots and collaborativerobots, are growing
Industrial robot supply trends in Taiwan
SAMICK ADM
Harmonic Drive Systems(Shanghai) Co., Ltd.

AzuminoDaegu

Harmonic Drive
Systems Inc.
ChongqingShenzen

ShanghaiTaipeiTaiwanRepresentative
OfficeSource: IFRS WR Industrial Robots 201630
Copyright © 2016 Harmonic Drive Systems Inc.

Production: Worldwide Production Network
Harmonic Drive AG■Location: Limburg, Lahn, Germany■Production scale: 10,000 units/month

Germany
USA

South Korea
Japan

Harmonic Drive LLC■Location: Massachusetts, USA■Production scale: 4,000 units/month

Japan Domestic

SAMICK ADM Co., Ltd.
■Location: Daegu, South Korea■Production scale: 1,000 units/month

Harmonic Drive Systems Inc.
Harmonic AD, Inc.
Harmonic Precision Inc.
Winbel Co., Ltd.
■Production scale: 50,000 units/month31

Copyright © 2016 Harmonic Drive Systems Inc.

Production: Further expansion in production
capacity to 80,000 units/monthCompletion of new plant building
Musser Westbuilding,
added in 2016
Existing Musser
East building

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Production: Crossed roller bearings
Harmonic Precision Inc.
■Location: Matsumoto-shi, Nagano■Employees: 118 (including temporary staff)(as of March 31, 2016)

Internal structure of unit product
Crossed roller bearing
Crossed roller bearings
Crossed roller bearings (CRB) arebearings using cylindrical rollers.
Features• Compact shape• Large load capacity• High strength at all angles→ Standard in HarmonicDrive® unit products,
planetary speed reducers, andmechatronics (MT) actuators
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Production: Capacity expansion for crossed roller bearings
Rise in products incorporating
crossed roller bearings(units sold)(units/ month)

35,62832,591
23,836

20,449(FY)

Production capacity(units/ month)
100,000

Plans for expanding
crossed roller bearings production
capacity

80,00060,000Current

38,000201620172021

2025(FY)

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Copyright © 2016 Harmonic Drive Systems Inc.

Research and Development:
The Total Motion Control Ecosystem
CloudBig Data/AI

Fog

Total Motion Control Concept
ICTSensors

Speed
reducers
MotorsControllers

New materials

Software

Otherelements

Drivers

Power supplies/
battery charge

IoT

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Copyright © 2016 Harmonic Drive Systems Inc.

Research and Development: Deepening of R&D■HarmonicDrive® fundamental/applied research• Lubricating materials• Stress analysis• Tiny 5 mm-diameter HarmonicDrive®
■Development of applications• Space• Medical equipment• In-vehicle• Service robots

Surgical robot

Service robot
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Copyright © 2016 Harmonic Drive Systems Inc.

Research and Development: Deepening of R&D■Silicon Valley office established• Gateway to latest robotics technologies• Joint research with SRI*: Abacus drive (pure rolling cycloid)• Joint research with other US research institutions anduniversities*Stanford Research Institute

Abacus drive(pure rolling cycloid)

Advantages of the Abacus drive• High energy efficiency (low loss)• Low reduction ratio region(complementary with strain wave
gearing devices)• Few parts

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Product Position
PrecisionAbacusConveying equipment,
processing equipment,
etc.

Robots,semiconductor
manufacturing equipment
High
precision
positioning

AbacusPositioning with acertain degree of
accuracy

Precision planetary
speed reducers

General industrialequipment

Focus on power
AbacusPrice38
Copyright © 2016 Harmonic Drive Systems Inc.

Our Growth Trajectory(100 mil. yen)

Achieved
highest evernet sales
Co-bots,
professional robots,
etc.

Net sales(non-consolidated)

Leading-edge
medical equipment

Flat panel displaysSemiconductor
manufacturing
equipment

Applications
driving growth

Industrial robots (further expand)

Machine tools

Customer 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)

39Copyright © 2016 Harmonic Drive Systems Inc.