Japanese Manufacturing Begins to Move on AI Demand | A Virtuous Cycle of Investment Begins

Hello.

Today, I would like to discuss the news that MinebeaMitsumi is investing 58 billion yen to increase production of precision bearings.

AI Demand Spreads to Electronic Components

Fan motors that cool data center servers and precision bearings used in HDDs. While they may seem unassuming, demand is expanding rapidly as AI adoption progresses. According to MinebeaMitsumi, sales of bearings for data centers have grown more than threefold compared to three or four years ago.

With this 58 billion yen investment, they will increase their bearing production capacity by about 30% to over 500 million units per month. Furthermore, they are looking ahead to adoption in humanoid robots and drones, taking the initiative for the next wave of demand.

Other Companies Also Making Large-Scale Investments

It is not just MinebeaMitsumi. Murata Manufacturing plans to invest 80 billion yen to increase production of high-performance capacitors for AI servers, and Panasonic Holdings plans to invest approximately 500 billion yen in AI infrastructure-related areas.Electronic component manufacturers are all moving toward large-scale investments. This landscape seems quite different from the image of Japanese companies that, until recently, were constantly criticized for having too much retained earnings.

A Good Cycle
There is clear demand for AI, and companies are increasing capital investment to meet that demand, boosting production capacity, and expanding their business performance. I feel that this cycle is finally beginning to move.
As I wrote in this note before, even if the presence of Japanese companies in final products has faded, they hold strengths in parts and materials that are incorporated into everything around the world. I feel that this underlying strength is finally beginning to be fully appreciated in the AI era.As a shareholder and as a Japanese citizen, I hope that the Japanese manufacturing industry will continue to thrive.

Thank you for reading until the end.