2019_4q_omron_e

39/39 Questioner(6)

(Questioner 6) I am McDonald. I have a question about slide 23 of your presentation on the Hannover Messe. Did you go? (Yamada) I didn’t. It was the first week of April, so unfortunately, I couldn’t go. The head of IAB went. (Q) I didn’t go but I heard that the biggest crowds were not at Siemens, which had the largest booth, but Amazon. It sounds like Amazon’s presence has risen significantly. For the IAB business, how do you view these kind of disruptive companies? Are they threats to the IAB business or do they represent opportunities? What is your view? (Yamada) Are you referring specifically to Amazon? (Q) Yes. Many companies had booths at Hannover Messe, but I understand that Amazon’s booth was the second largest, behind Siemens. Many of the people that went to the trade fair that I have spoken to were trying to understand what Amazon hoped to achieve. Obviously, there is the AWS business as well as other things like cloud and edgecross . Is Amazon a threat or an opportunity for OMRON? (Yamada) Very simplistically, there are elements of both. Amazon is using OMRON products in their automated systems. A lot depends on what Amazon considers to be their business domain. However, and this is probably true for other industrial automation players as well, the actual manufacturing at the shop floor level is different for each of our manufacturing customers. So, even if there are commonalities in terms of a high-level shift to smart technologies, the process for capturing data at the level of the shop floor for control purposes is different for each facility. Therefore, to be successful, it is important to have an understanding of the manufacturing process for each customer to build automated systems. OMRON focuses on the optimization and automation of production lines. For OMRON, we aim to develop systems that can be connected into the upper layers, regardless of whether the upper layer is provided by Siemens or another player. (Q) I have another question. I was not able to go to the Hannover Messe but I went to the Automate Show in Chicago. To date, AEC represented a significant portion of OMRON’s North America revenues. When AEC goes away, how will this impact your presence in North America? When I went to Automate, I didn’t have much time and I unfortunately had trouble finding your booth. However, I have heard from others that there is a lot of talk about 5G, as was mentioned earlier, and IOT. I felt like the OMRON booth at Automate did not present OMRON’s 5G strategy very clearly. For instance, many of the products on display were fixed line as opposed to wireless. What is OMRON’s 5G strategy? (Yamada) 5G technology is similar to wireless but with strong directionality. On a shop floor where device density is very high, wired solutions are still superior. That said, we are already engaged in research to understand where value can be created when it becomes possible to enable a shop floor for 5G. At this point in time, where the imperative on the shop floor is to ensure product quality, we would not expect to see that there will be an immediate shift to wireless or 5G technology, but that could change dramatically depending on how the technology evolves. We are monitoring developments in this area closely and are engaged in R&D. (Itagaki) Thank you. We have gone well over the allotted time. We will close the Q&A session here. We would be grateful if you can take the time to complete our feedback sheet. This concludes the FY2018 results briefing for OMRON. Thank you for your participation today. (Yamada) Thank you.