Harmonic Drive Faces Near-Term Headwinds, but We Expect Robotics Demand Recovery Over Long Term

Harmonic Drive Systems has been able to capitalize on demand growth with industrial robots and semiconductor production equipment, by having its compact strain wave reduction gears (also known as speed reducers) serve as core components of both. The company seeks to continue improving its product quality toward existing applications as well as to find new applications that can serve as new long-term growth drivers. We think small industrial robots and semiconductor equipment will continue to serve as key target markets, as miniaturization of equipment will require small gears with high precision and durability.