Mitsubishi Electric Aims for Annual Capacity of $9.3bn (¥1trn) for FA business

Driven by demand for automation and IoT, Mitsubishi Electric (6503 JP) announced that it will aim to increase production capacity at its Factory Automation (FA) division to ¥1 trillion by FY2025 – an estimated increase of 35% from current levels, and to generate the bulk of sales from overseas markets. Demand drivers are expected to be automation and IoT needs, and initial stages of capex will cover domestic facility expansion as well as plans to increase its footprint in India and China (a new plant in Jiangsu Province will open this year). These plans are not unique and would mirror what most of its FA peers are doing today (with the ‘Made in China 2025’ initiative), but China demand visibility is currently firm from smart devices and EV (electronic vehicle) manufacturing needs. Asia ex-Japan makes up around a quarter of the company’s group FY OP, with the majority coming from China and Korea (with OLED production demand).