When discussing the Japanese economy, the "Lost Three Decades" seem to be the settled conclusion—stagnant growth and a bursting bubble. However, another set of data is thought-provoking: Japan's chip equipment sales are projected to reach a record high in 2025; nearly 40,000 companies worldwide have been established in Japan for over a century; and Japan holds two of the four major industrial robot manufacturers, together accounting for approximately 70% of the global market share.

Why does a "declining" country still possess such strong vitality in the core areas of manufacturing?

Three Lost Decades Later:

A True Portrait of Japanese Manufacturing

While the Japanese economy did experience a prolonged period of low growth, its manufacturing sector was far from a complete collapse.

In the semiconductor field, Japanese companies hold approximately 30% of the global market share in equipment and materials. In the first eight months of 2025, sales of Japanese chip equipment reached 3.38 trillion yen, a 19.2% year-on-year increase, setting a new record. In the coating and developing equipment sector, Tokyo Electron holds a global market share of approximately 90%; and in 14 of the 19 core semiconductor materials, Japanese companies hold over 50% market share.

Looking at corporate vitality: Japan has nearly 40,000 companies that are over 100 years old, more than 3,000 that are over 200 years old, and even 21 "millennial" companies. While the number of bankruptcies in 2025 exceeds 10,000, about 80% are small-scale bankruptcies, indicating that the foundation of the manufacturing industry remains unshaken, with recurring profits maintaining positive growth for 19 consecutive quarters.

The "surface" of Japanese manufacturing may not be so glamorous, but its "foundation" is far more solid than imagined.

The Secret to Navigating Economic Cycles:

Not a Miracle, but the Inevitability of Long-Term Vigilance

Why are Japanese companies able to maintain resilience during economic downturns? The answer isn't some brilliant invention, but decades of dedicated cultivation.

First, the "improvement" culture is deeply ingrained. In Japanese factories, "improvement" (Kaizen) isn't just a slogan, but a daily work habit for every employee. Continuous improvement through company-wide participation allows the organization to remain highly efficient without massive investment.

Second, a long-term strategy—decades of dedicated cultivation in niche markets have built insurmountable barriers. From Tokyo Electron's 90% global market share to SMC's leading position in pneumatic control, none of these successes are overnight successes.

The AVEX Kuwana plant, visited during this trip, is an excellent example. This core Toyota supplier, founded in 1949, adhered to the "total management" philosophy during the 2008 financial crisis, preferring company-wide participation in innovation to weather the storm rather than laying off employees. Many of the machines in the factory are decades old, yet they all function perfectly—not because the equipment is indestructible, but because the company values the inheritance and continuous maintenance of the skills of veteran craftsmen. This philosophy of "making the most of old equipment" is precisely the most pragmatic survival wisdom during economic downturns.

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The Fusion of Lean and Intelligence:

Japan's "Third Path"

In the AI era, many believed that Japanese manufacturing would be marginalized. The opposite is true—lean tradition is the natural breeding ground for intelligent manufacturing.

Why? Because the prerequisites for digitalization and intelligentization are process standardization and data reliability. A factory that hasn't even mastered 5S will simply be a "garbage in, garbage out" factory, no matter how advanced its MES system. Decades of lean practices by Japanese companies have laid a solid foundation for digital transformation.

In 2025, the University of Tokyo and Denso Corporation jointly launched the "Sustainable Production System Infrastructure" project, explicitly proposing to leverage digital technology and AI to enhance Japan's traditional advantages in lean manufacturing. Japan did not choose the radical route of "completely replacing humans with machines," but rather a gradual path of "human-machine integration"—first using lean to maximize human wisdom, and then empowering that wisdom with digital technology.

The Toyota Kyushu Plant (Lexus production base) and Kato Seisakusho (a third-tier supplier to Toyota) visited during this trip represent two typical paradigms: the former demonstrates a perfect combination of lean manufacturing and high-end automation; the latter proves that small and medium-sized enterprises with limited resources can also gain a foothold in fierce competition by mastering the essence of TPS.

Why go to the site?

These principles can be grasped by reading books and watching videos. But why spend six days flying to Japan for a hands-on visit?

Because much of the wisdom in manufacturing cannot be experienced without being there in person.

At Toyota's Kyushu plant, you'll see automated production lines with robotic welding and high-precision assembly, and you'll witness quality inspectors feeling even 0.1 millimeter gaps with their fingertips. Combining these two impressive experiences allows you to truly understand the highest level of "human-machine collaboration."

At the AVEX Kuwana plant, you'll see decades-old equipment undergoing intelligent transformation—not a crude "rebuild," but a step-by-step iteration based on the existing foundation. This approach is highly valuable for Chinese SMEs with limited budgets.

At Kato Seisakusho's training center, you can even operate equipment yourself, experiencing the specific processes of lean production. This "learning by doing" is far more profound than sitting in a classroom listening to PowerPoint presentations.

More importantly, you'll see an atmosphere on-site—everyone is thinking about "where can we improve," and every workstation is covered with improvement proposals. This atmosphere cannot be conveyed through a screen, but when you are in it, it will make you rethink: what exactly is missing from our factory?

For China's manufacturing sector,

slowing economic growth, a diminishing demographic dividend, and a complex external environment

these challenges bear a striking resemblance to the predicament Japan has faced over the past thirty years.

The path Japanese companies have taken

is the path we are about to take.

From May 31st to June 5th, 2026,

a 6-day, 5-night trip from Fukuoka to Nagoya...

It may not be enough to bring back a directly replicable solution,

but it's enough to make you rethink:

If our businesses also face a "lost decade,"

what will we use to navigate the cycle?

The answer lies hidden in

every visit, every course exchange,

and every on-site observation during this trip.