Here we discuss the growing demand for factory robots worldwide, the importance of cybersecurity on both an enterprise and personal level, and how Dexcom continues to disrupt diabetes care.
Please enjoy these insights from our research team.
ROBO: A Factory Robot Buying Frenzy
Robotics demand is booming, and the world’s leading manufacturers of factory robots are struggling to keep up. Entering 2022, Fanuc – the Japan-based global leader – was sitting on a record-high order backlog of nearly JPY 300 billion, more than double the level just before the start of the Covid-19 pandemic, and more than a full-year worth of sales. As we head into earnings season, we expect orders at ROBO members such as Fanuc, Yaskawa, ABB, and Teradyne to continue to trend up as a number of powerful drivers remain firmly in place. First, the e-commerce boom is driving an insatiable demand for logistics automation solutions, including new areas of warehousing and distribution operations. Second, the rapid shift to electric vehicles is pushing carmakers toward modular and flexible production systems that are highly automation intensive. Third, labor shortages are increasingly pressing, putting automation at the top of business leaders’ minds.
Japanese companies, which account for 21% of the ROBO index by weight, manufacture around 45% of the world’s industrial robots, according to a recent report from the International Federation of Robotics (IFR). And they are supported by a host of critical component suppliers, such as Harmonic Drive, Nabtesco, THK, and SMC. While Japan is also one of the top users of robots, ranking third on the IFR’s list of most automated countries, the country exports nearly three-quarters of its robot production, primarily to China and the US. We believe that Japanese companies are well-positioned to continue to benefit from the explosive growth in China, which went from the world’s twenty-fifth most automated country in 2015, to the ninth in 2020, with 2.5 robots for every 100 workers, just slightly below the US at 2.6 robots per 100 manufacturing employees.
THNQ: Cybersecurity in the Spotlight
Headlines are flooded with talk about cybersecurity in the wake of global events. As the world continues to digitize and cyber threats increase, the importance of protecting digital assets through cybersecurity has become critical. With the Ukraine–Russia conflict now in focus, it’s important to stick to the fundamentals and see where demand is needed. This includes protecting national security assets, such as energy/infrastructure, hospitals, and military while being able to continue operating as usual in areas like financial services. Any major disruption to access or trust in these services could majorly threaten our national security and livelihoods.
At the enterprise level, companies and their employees rely on protected and functioning platforms to keep our world moving. At the individual level, we rely on our devices and websites remaining uncompromised and available; THNQ index members Cloudflare and NortonLifeLock are helping protect our access to the internet, automatically. In fact, Cloudflare, which ensures safe access to websites and applications, has been deemed so essential that they have been consulted to continue operating in Russia, to provide access to independent information sources for civilians.
Cybersecurity exists to find ways to eliminate the weakest links across hardware, software, and internal and external threats using artificial intelligence. THNQ index members Darktrace, Palo Alto Networks, Rapid7, and Varonis are the leading companies leveraging AI to implement zero-trust approaches and provide timely incidence prevention and response.
HTEC: Dexcom's G7 Approved for Launch in Europe
Earlier this month, Dexcom announced that its long-awaited next-generation continuous glucose monitoring device (CGM), the G7, has received CE Mark approval for use in Europe. CGM devices automate glucose checking for people with diabetes, replacing the need to use needles several times each day. A study of the G7 shows that it continues to provide best-in-class accuracy and is a significant improvement from its previous generation, the G6. In addition to better accuracy, the device is smaller—the size of a nickel—and easier to use.
We are encouraged by this news for three reasons. First, these device improvements continue to illustrate Dexcom’s technology leadership. Second, we believe this sleek new design will enable Dexcom to penetrate further into the much broader Type 2 diabetes market. Finally, it demonstrates that regulatory authorities are working through the approval of non-COVID technologies that may have been delayed due to the pandemic, and it also further underscores the market demand for accurate remote monitoring devices. Last week Dexcom announced a four-for-one forward stock split. We continue to see this company as being a strong fit for the HTEC Index.