Nikon

Nikon sells capital equipment: semiconductor lithography systems, precision metrology tools, and industrial microscopes to chipmakers and advanced manufacturers, recognized upon delivery and customer acceptance. Its Precision Equipment division, generating roughly $1 billion in revenue, sells to a concentrated base of semiconductor fabs, electronics assemblers, and automotive suppliers who budget for these tools as multi-year capital expenditures. Revenue is lumpy and tied to facility build-out cycles rather than subscription consumption. The model's structural advantage is installed-base lock-in: once a fab qualifies Nikon's metrology or inspection tools in its production line, swapping to a competitor requires requalifying every downstream process, creating high switching costs. Margin lives in the proprietary optics and sensor IP embedded in each unit — the hardware carries a significant Bill-of-Materials component, but Nikon's differentiation lies in precision engineering that competitors cannot easily replicate. Service and spare-parts revenue provides a partial annuity layer on top of hardware sales, though the primary transaction remains a one-time equipment purchase. The lithography business operates at much lower scale than market leader ASML, making it a structural share-taker in that segment. No recurring software or platform fees are attached to the equipment; the model is classic capital-goods hardware with post-sale service attached.