Hitachi targets robust growth in the US under Biden’s infrastructure plan

Hitachi expects a flurry of infrastructure spending and a return to manufacturing under the Biden administration, as the Japanese industrial group bets on the US market to propel its next phase of growth.

Keiji Kojima, the group’s new president, said Hitachi will hire more digital talent from India to compete in the United States after $9.5 billion deal To purchase GlobalLogic, a software engineering company based in Silicon Valley.

“Overall, we believe that the biggest opportunity lies in North America. We believe that a large part of the industries, including manufacturing, will come back to North America,” Kojima, who was appointed last week, told reporters.

Hitachi’s focus on the United States comes after years of efforts to transform the sprawling Japanese conglomerate into an IT and infrastructure specialist by merging and selling listed subsidiaries.

With the asset restructuring program nearing completion, Kojima said “the next 10 years will be a decade of growth,” as the group aims to expand its Lumada software business worldwide.

The company will increase investment in the United States, as President Joe Biden presents his work A trillion dollar infrastructure plan. Biden pushed for manufacturing subsidies to help semiconductor companies produce more goods in the United States.

Hitachi said in May that its wholly owned subsidiary of Hitachi High-Tech will establish a company Semiconductor Research Facility In Oregon, where all US chip technologies will be centralized.

The group did not disclose how much it would spend on the new facility, but Kojima said it would establish a “close partnership” with US semiconductor companies, as the Biden administration increases spending to strengthen its supply chain.

North America is already Hitachi’s largest market outside of Japan, accounting for 13 percent of its annual revenue.

Prior to the acquisition of GlobalLogic, Hitachi bought JR Automation, a Michigan-based industrial robot integrator, for $1.4 billion in 2019. The Japanese group said it wanted to increase revenue from its companies in the North American industrial sector to 200 billion yen (1.8 billion yen). dollars) in the current fiscal year, up from 73 billion yen three years ago.

Analysts said the challenge for Kojima will be overseeing the GlobalLogic integration, a costly endeavor to expand Hitachi’s software business while digitizing its hardware assets. The group’s 6 percent operating profit margin is still low compared to global peers such as Siemens and ABB.

“We still have a lot of product business, so we need to innovate Hitachi products using GlobalLogic’s digital resources,” said Kojima, who oversaw the creation of Lumada.

He added that the company may make additional acquisitions in the rail and healthcare businesses to fill gaps in digital capability.

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