Navigating Uncertainty and Sustaining Growth in a Rapidly Changing World

THK is opening new frontiers and expanding its global reach as it strides toward a sustainable future.

In a world rife with geopolitical risks, inflation and uncertainty, businesses must adopt innovative strategies to thrive. Akihiro Teramachi, Chairman and CEO of THK, a global leader in manufacturing, shares his insights into how the company perceives and creates value-driven narratives amidst these challenges. THK aims to meet its management goals by 2026, achieving consolidated revenue of JPY500 billion (US$3.3 billion), operating profit of JPY100 billion (US$662.2 million), return on equity (ROE) of 17% and earnings per share (EPS) of JPY590 (US$3.9).

Wave of Opportunity

“We are in the midst of a big wave, and there are many business opportunities for us,” Teramachi says. “It is important to be flexible in adapting to changes and to have the right mindset.” THK’s approach involves integrating its hardware and digital technologies into manufacturing processes and end-products. This includes the creation of a “manufacturing service” that utilizes digital technologies to visualize products. The company’s OMNIedge, an Internet of Things (IoT) service, collects data from sensors attached to machine parts, digitizes it and transmits the data through a secure network to make distributed manufacturing—or Manufacturing-as-aService—practical. “This approach is crucial for the stable operation of facilities in a digitalized society,” Teramachi says. “Our Omni THK service leverages remote operations and digital transformation to streamline information sharing and enhance operational efficiency.”

THK's next-generation robots and linearrelated products aligned with IoT will also ride the wave. Teramachi predicts a future where each person will need a robot. These robots will be more versatile, bridging the gap between single-task devices and the multitasking requirements of modern life. THK's role in this evolution extends beyond automotive and robotic applications to supporting semiconductor and electronic component manufacturing. “The semiconductor industry's demand is on the rise and is expected to grow significantly, driven by emerging technologies such as big data and digital currencies,” Teramachi says.

Bringing Linear Motion to Mobility

The revolutionary synergy of AI, ICT and robotics has ushered in a digital society where hardware products closely tied to digital cars, such as THK's linear motion components, come to the forefront. “Our linear motion products will be incorporated into these vehicles, making them energy-saving, energy-efficient, compact and powerful,” Teramachi says.

The company developed its own prototype electric car for demonstration purposes that incorporates innovations that contribute to energy conservation, such as a variable flux inwheel motor, active suspension, MR fluid active damper tube, electric brakes, non-contact power supply systems and user-friendly features like a stealth seat sliding mechanism. “With the automotive industry aiming to double its size by 2030, it's evident that such solutions could have a substantial impact,” Teramachi adds.

Local Procurement for Global Expansion

THK is further driving change through its strategy of expanding globally based on local procurement. Manufacturing products in proximity to where they are needed allows the company to eliminate lengthy shipping times and the accompanying environmental costs, providing its products on a block-by-block or regional basis.

The standardization of quality control is critical as automation takes center stage. To achieve this, THK is leveraging digital technology to facilitate technology sharing. It is also bolstering automation, not confined solely to the company’s operations but expanding across new sectors. “In this landscape, the importance of quality becomes paramount,” says Teramachi. THK’s OMNIedge predictive maintenance service is creating value while also reducing energy consumption, minimizing wasteful materials and components, and fostering the company’s Green Transformation (GX).

Internally, THK is digitalizing to drive transformation that involves narrowing down human tasks, emphasizing digital-centric manufacturing, and advancing human resource development in a way that is anticipated not only to impact the company but also to bring about substantial societal changes.

As manufacturing continues to evolve and intersect with a digital world, Teramachi and THK are not only navigating challenges; they are spearheading the transformation toward a more sustainable, interconnected and dynamic future. The company’s commitment to manufacturing excellence, production in local regions, Manufacturing-as-a-Service, sustainability, and innovative service models position THK as a leader in the ever-changing landscape of global business.

“We are in the midst of a big wave, and there are many business opportunities for us.”

Net revenue last year was nearly $300 million at Coalition and more than $110 million at At-Bay.

While neither startup is yet profitable, their growth stands out in the struggling fintech sector, earning them spots on Forbes’ 2024 Fintech 50 honor roll. (See the full list beginning at right.) Both still have money in the bank, but should they need to raise more capital soon, they’d likely have to take a valuation cut given the state of the industry. Coalition last raised funds at a $5 billion valuation in 2022, making Motta’s 20%-plus ownership stake worth a bit less than $1 billion, by our estimate.

Neither Coalition nor At-Bay has yet suffered a catastrophic loss—which is always a looming risk. Plus, there’s another buzzsaw that other fintech innovators, including robo-financial advisors, have run into: Huge incumbents can mimic your ideas and maybe beat you at your own game. David Lewison, a national practice leader at insurance brokerage Amwins, which writes $500 million a year in cyber insurance premiums for small and midsize markets, notes that Chubb and some other established insurers have now made network scans a standard part of their risk assessments. But, he says, in his experience, Coalition, At-Bay and Corvus were the earliest and have been the most aggressive to actively scan for weakness and call problems to their customers’ attention.

Corvus? That’s a third cyber insurance fintech founded in 2017. Travelers acquired it at the start of 2024 for $435 million, a steep discount to the $750 million it was valued at in a 2021 fundraising, but two and half times the $170 million investors had poured into it.

Even while seated at the conference table in At-Bay’s San Francisco headquarters, the six-footfour Iram towers over his employees. On this January morning they’re briefing him on the impact of “Citrix Bleed”—a vulnerability related to Citrix’s remote access technology that it disclosed and issued a patch for on October 10, 2023. After third-party researchers figured out how it could be exploited, At-Bay’s engineers, all based in Tel Aviv, sprinted to build code to determine which customers were most likely to become victims. They finished in two days, identifying 345 customers (out of 35,000) using the product and contacted the 70 highest-risk ones individually while simultaneously urging all 345 to apply Citrix’s patch. Within six weeks, 334 had done so.

Timely patching is crucial; after Citrix flagged the vulnerability, hacking groups with names like