The Next Big Theme (Japan): June 2023

Robotics and Artificial Intelligence

Fanuc’s Collaborative Robot (Cobot) Breaks Record

On May 15, Fanuc, a leader in the industrial robotics space, announced that a software update to the existing CR-35iA cobot will convert it to the CR-35iB model and raise its maximum payload from 35 kilograms to 50 kilograms, setting a record for payload by a cobot.¹ The CR-35iB model is the newest in Fanuc’s CRX series and will be used primarily for handling and assembly. Fanuc displayed the new model at the Automate show in Detroit, Michigan between May 22 and May 25, and is slated to start mass production in August.²

CyberAgent Announces Self-Developed Large Language Model (LLM)

As the scramble for conversational generative AI models intensifies, on May 17, Japanese media giant CyberAgent unveiled its own self-developed Japanese LLM. CyberAgent’s model is trained on Japanese data from Common Crawl and Wikipedia, and aims to offer users an LLM that is fine-tuned to Japanese language and culture.³ The model will be accessible through the American AI application platform Hugging Face. Furthermore, on May 18, CyberAgent also announced that it will introduce an automatic ad copy generation function to its “Extreme Prediction AI” service, which will combine its proprietary LLM and OpenAI’s ChatGPT APIs.⁴

Gaming

Nintendo’s Newest Legend of Zelda Game Records Historical Sales Right After Release

On May 12, Legend of Zelda: Tears of the Kingdom (TotK), the sequel to the highly successful Nintendo game Legend of Zelda: Breath of the Wild (BotW), was released and achieved nearly 10 million sales in only three days.⁵ Tears of the Kingdom became the fastest selling Legend of Zelda title and the fastest selling Nintendo game in North America irrespective of console. Unlike previous Legend of Zelda games, 2017’s Breath of the Wild was developed in the open-world format, a genre in which players can freely explore a wide virtual space. Tears of the Kingdom’s early sales data may be seen as confirmation that the open world format works well with Legend of Zelda games.

Fintech

The JPX signs a memorandum of understanding with the Asia Development Bank on Fintech

At a signing ceremony on May 3, the Japan Exchange Group (JPX) signed a memorandum of understanding (MoU) with the Asia Development Bank (ADB) to build a framework of cooperation for the development and promotion of capital markets, sustainable finance, and digital technology in financial services in the APAC region. In addition to promoting the issuance of ESG bonds, the JPX and ADB intend to provide to support fintech startups that contribute to sustainability, with the overarching goal of boosting economic growth in APAC.⁶ In 2022, fintech investment in the APAC region was estimated to have reached $50bn, surpassing that of the EMEA region (Europe, Middle East, Africa).⁷

Semiconductors

Japanese Semiconductor Makers Aim to Start or Increase Production of SiC Power Semis

On May 19, semiconductor giant Renesas announced that it plans to begin investments into production of silicon carbide (SiC) power semiconductors with the goal of starting mass production at its Takasaki factory in 2025.⁸ SiC power semiconductors have higher withstand voltages and higher thermal resistance than conventional silicon (Si) semiconductors, resulting in faster switching operation and lower power losses. In recent years, investment into SiC power semiconductors is on an uptrend. In addition to Rohm’s November 2022 announcement that it will invest up to 220bn JPY into SiC power semiconductors through 2026, in March 2023 Mitsubishi Electric announced that it will build an SiC manufacturing unit in Kikuchi city in Kumamoto prefecture and foresees production starting in April 2026.^9,10

Footnotes

1. Nikkei, “ファナック、50キロ運べるロボット開発　世界最高,” as of May 16, 2023.

2. Business Wire, ”FANUC America Introduces High-Payload Cobots, Demonstrates Industry-Leading Automation Solutions, and Sponsors the Education Pavilion at Automate”, as of May 19, 2023.

3. CyberAgent, “サイバーエージェント、最大68億パラメータの日本語LLM（大規模言語モデル）を一般公開 —オープンなデータで学習した商用利用可能なモデルを提供—,” as of May 17, 2023.

4. CNET Japan, “サイバーエージェント、’極予測AI’にLLM技術とChatGPTを活用した広告コピー自動生成機能,” as of May 19, 2023.

5. CNET Japan, ”任天堂、’ゼルダの伝説”最新作が発売3日間で世界1000万本を販売‐‐国内は224万本’,” as of May 18, 2023.

6. Asian Development Bank, “アジア・太平洋地域の資本市場発展に向けて、ADBとJPXが協力覚書を締結,” as of May 3, 2023.

7. Statista、PitchBook、KPMG, “Value of investment in fintech companies worldwide from 2019 to 2022, by region,” as of February 2023.

8. Nikkei, “ルネサス、25年にSiCパワー半導体の生産を開始へ,” as of May 19, 2023.

9. Nikkei, “ローム、次世代のSiCパワー半導体を12月量産開始,” as of November 25, 2022.

10. Nikkei, “三菱電機がパワー半導体投資を倍増、SiC新工場26年4月に稼働へ”, as of March 14, 2023.

注意

Investing involves risk, including the possible loss of principal. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments may be subject to higher volatility. The funds are non-diversified.

The companies in which the Disruptive Technology Funds invest may be subject to rapid changes in technology, intense competition, rapid obsolescence of products and services, loss of intellectual property protections, evolving industry standards and frequent new product productions, and changes in business cycles and government regulation. There are additional risks associated with investing in mining industries.

The Genomics, Healthcare, Pharmaceutical, Medical Device and Biotechnology sectors can be affected by government regulations, rapid product obsolescence, intense industry competition and loss or impairment of patents or intellectual property rights.

Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds’ summary or full prospectus, which may be obtained by calling 1.888.493.8631, or by visiting globalxetfs.com. Please read the prospectus carefully before investing.

Global X Management Company LLC serves as an advisor to Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Global X Management Company LLC or Mirae Asset Global Investments.

Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Beginning October 15, 2020, market price returns are based on the official closing price of an ETF share or, if the official closing price isn’t available, the midpoint between the national best bid and national best offer (“NBBO”) as of the time the ETF calculates current NAV per share. Prior to October 15, 2020, market price returns were based on the midpoint between the Bid and Ask price. NAVs are calculated using prices as of 4:00 PM Eastern Time. The returns shown do not represent the returns you would receive if you traded shares at other times.

Indices are unmanaged and do not include the effect of fees, expenses or sales charges. One cannot invest directly in an index.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalized investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.