Japanese industrial robot maker Fanuc plans to spend 3.5 billion yen ($28.3 million) on a new plant it hopes will help it capture business opportunities related to 5G smartphones and self-driving cars.
The company intends to increase production of what is known as nano-level processing equipment, in an effort to meet demand for molds for high-precision camera lenses used in the phones and vehicles.
Fanuc plans to consolidate two production facilities for high-precision processing equipment at its headquarters in Yamanashi Prefecture, west of Tokyo, and start up the new plant in October. The company makes about two units a month at its existing plants but plans to boost the new factory's capacity to 10 in three years.
Domestic and overseas rivals also make the advanced nano-level processing equipment, priced at up to 100 million yen. Fanuc intends to sharpen its own technology as it steps up production, enhancing the accuracy of key products including numerical control equipment.
Car-mounted cameras are set to spread as part of autonomous driving systems, while 5G mobile networks will allow users to send high-quality videos 100 times faster. These trends have convinced Fanuc that demand for molds for high-precision lenses will surge.
Fanuc expects its net profit will drop 59% to 62.3 billion yen for the fiscal year through March 2020, dragged down by a decline in global factory investment resulting from the U.S.-China trade conflict as well as sluggish demand for processing equipment for smartphones. The company is under pressure to raise output of high-value products.