摩根士丹利-北美机器人行业：当工厂等同于机器人生成AI驱动制造业重构-RoboticsNorth America：When Factory=Robot-20260326

MorganstanleyRESEARCH

March26,202610:29PMGMT

Robotics|NorthAmerica

WhenFactory=Robot

Gen-Alisdrivinga丨Cambrianexplosion丨ofrobotsaimedat

replacinghumantasksinfactories.Butit丨sworthconsidering

whethertheentiremanufacturingprocessitselfmustchange.Whatiffactoriesweredesignedasonegiantrobot丿withhumaninterventiononlyasanafterthought?

Nowmaybetimeforagrounds-upmanufacturingrethink-cleanslate….

•InElonMusk's5StepDesignProcess,TheRobotsComeinLast.AccordingtoTeslaCEOElonMusk,automation(whileimportant)is

oftenabandagefor

apoorlydesignedmanufacturingprocess-

cementingcriticaldesignwhile

makingthemoccurfasterandbemuchmoreexpensive.WalterIsaacson's

2023biographyofMuskoutlinesmultipleaccountsofMusksurveyingtheModel3productionlineandliterally'rippingout'robotsonthespotifhefelttheywerenot100%necessary.Beforeconsideringbringingintherobots:

questiontherequirements,simplify,delete,delete…Thebestrobotmaybenorobot.

•TimetoReflect.Notallmanufacturingiscreatedequal.HasmanufacturingbeentrulytransformedsinceHenryFord'sfirstmovingassemblylinein1913?TheemergenceofGenAIiscreatingamomentof'pause'forengineerstore-assessfundamentalrulesthathavebeenlearnedandpasseddownfor

decades.Withallthetalkof"rebuildingUSmanufacturing"-it'sincrediblyimportantforpolicymakerstoincentivizetherightkindofmanufacturing.

•CounteringChina'sRobot&LaborAdvantage.Accordingtothe

InternationalFederationofRobotics(IFR),

in2024,Chinaaccountedfor54%ofallindustrialrobotsinstalledglobally.Ourconversationswithrobotics

expertsindicatethatpotentially>90%ofthecriticalcomponentssupplychainisinsomewaycontrolledbyChina.Comparingthescaleofhumanmanufacturingworkforcespaintsasimilarstory.TheChineseandUS

manufacturingecosystemsarefundamentallydistinctandalmostcertainlywillremainso.Necessityisthemotherofinvention.

•AnAgenticManufacturingFuture.ImagineasingleAIsystemthatmanagedeverythingfromdesign,procurement,production,andout-boundlogistics-notjustonefactory,buttheentiresupplychainasaunifiedapparatus.Everymachineinterconnectedasone.Abottleneckappears?Everythingelse

autonomouslyadjusts.Needtobuildanewline?Designsarepreparedandequipmentisalreadyontheway-therobotswillassembleit.Runningthinoninventory?Outputistoggledupandmaterialordersareautomaticallyplacedwithanupstreamfactory-everynodeinthesupplychainreacts

accordingly.Facilitiesreplicatelikecellsinbiologyandwitheroffwhennot

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MoRGANSTANLEy&Co.LLCAdamJonas,CFA

EquityAnalyst

Adam.Jonas@

+1212761-1726

WilliamTackett,CFA

ResearchAssociate

William.Tackett@

AndrewSPercocoEquityAnalyst

+1212761-6028

Andrew.Percoco@

ChristopherSnyder,CFAEquityAnalyst

+1212296-4322

Chris.Snyder@

SanjitKSingh

EquityAnalyst

+1212761-4470

Sanjit.Singh@

TobyOkwara

EquityAnalyst

+1415576-2060

Toby.Okwara@

DanielaMHaigianEquityAnalyst

+1212761-1693

Daniela.Haigian@

OscarRSaavedra

+1212761-6071

ResearchAssociate

Oscar.Saavedra@

+1212761-0827

MorganStanleydoesandseekstodobusinesswith

companiescoveredinMorganStanleyResearch.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofMorganStanley

Research.InvestorsshouldconsiderMorganStanley

Researchasonlyasinglefactorinmakingtheirinvestmentdecision.

Foranalystcertificationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthisreport.

2

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needed.Ifthissoundsoverlyfuturistic,wewouldhighlightthatthisisnotanideawe'vedreamtupourselves.It'sbecomingcleartousthattheconceptof

rethinkingmanufacturingasafullyAI-defined,interconnectedsystemis

becomingoneofthehottesttopicsamongmanufacturingexperts,hard-techfounders,andinvestmentfunds.Agrowingnumberofsignsareallaroundus.

•MajorPrivateCompanies/StartupstoWatch.Wearefollowinganumberofrecentlyannouncedorreportedstartupsthatfitunderthisıfactory=robotıthesis.Tonameafew:

°AmazonfounderJeffBezosisleadingastealthstartupcalled

Project

Prometheus,

hisfirstCEOpositionsince2021丿todevelopAlfor

engineeringandmanufacturing(cars丿aerospace丿electronics丿andmore)

with$6.2bninreportedfundingasofNovember2025

(NYT)

.

■Separately丿itısrecentlybeenreportedbytheWSJthatBezosisin

theprocessofraising

$100bnforanAImanufacturingfund

whichisseparatefrombutrelatedtoProjectPrometheus(JeffBezoshasnotcommentedtoourknowledge).ThefundwouldreportedlybuyuplegacymanufacturingcompaniestointegratethemwithAl.lf

completed丿itwouldbethelargestsinglefundraiseforan

investmentfundsincethe$100bnlaunchofSoftBankVisionFundin2017.

°FormerOpenAlHeadofResearch丿BobMcGrew丿isreportedlyraising$70mnata$700mnvaluation丿perWSJ丿foranewstartupcalle

dArda

whichaimstocreateasoftwareplatformtorunautonomousfactories.

°RivianfounderandCEORJScaringerecentlyspunou

tMindRobotics

asanindependentcompanytobuildgeneralizableAlmodels丿hardware丿

anddeploymentinfrastructureforfactoryautomation.ltisreportedlyvaluedat$2.0bn

pertheWSJ.

°UberfounderTravisKalanickrecentlylaunched

Atoms,

arebrandingandexpansionofhispost-UbercompanyCityStorageSystemswhichfoldsinCloudKitchens(ghostkitchens)丿ProntoAl(autonomousminingvehicles)andothers丿andaimstobuildspecializedroboticssystemsforawide

rangeofindustries.

°Inthisnoteweprofile18startupsrelevanttothe"Factory=Robot"debate:Arda,Atoms,BrightMachines,Cellares,Divergent,Dyna,

GenesisAI,Hadrian,Intrinsic,Matter,MindRobotics,Nominal,

PhysicalIntelligence,ProjectPrometheus,SkildAI,TulipInterfaces,Vention,VulcanForms.

•KeyPublicMarketExpressions.

°OurUSAutoTeam(ledbyAndrewPercoco)recentlyvisitedTesla's

(TSLA)CybercabproductionatGigaTexas.Thecompanyisattemptingagrounds-uprethinkofautoproduction-cuttingtheprocessdowntonomorethan20stepstoeventuallyproduceonecarevery10seconds.

■Seebelowforfullteamtakeaways

:TeslaInc:UnlockingtheRobotaxi

Flywheel(18Mar2026)

°OurUSSoftwareteam(includingSanjitSingh)highlightsPalantir's

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MoRGANSTANLEyREsEARcH3

(PLTR)Ontologyasakeyenablerofagenticoperationsfor

manufacturers,servingasalivedigitaltwinofthebusinessthatunifiessiloeddatafromERPsystems,shop-floorsensors,maintenancerecords,andotherenterprisesourcesintoasingleoperationalmodel.For

manufacturers,thatmeansconnectingmachines,workorders,

technicians,andproductionworkflowsinrealtime,allowingteamsto

automateprocesses,improvedecision-making,anddeployAIagentswithgroundedbusinesscontext,governedactions,andauditabilityacrossthefactoryfloor.

■Seebelowforfurtherdetails:Palantir'sOntologyCreatesDigitalTwinoftheManufacturingEnterprise

°OurUSSemisteam(ledbyJoeMoore)continuestorateNVIDIA

(NVDA)ashisTopPick.Thecompany’s

Omniversesimulationplatform

allowsmanufacturerstobuildphysics-baseddigitaltwinsoffactoriesandrunreal-timesimulationswhichcanmateriallyreduceproductionplanningcyclesandsupportmoreautonomousdecisionmakingonthefactoryfloor.

°OurUSMulti-IndustryIndustrialsteam(ledbyChrisSnyder)prefers

Eaton(ETN)andRockwellAutomation(ROK)astheirfavoriteUSre-shoringpicks.ROKisincreasingitsexposuretoagenticmanufacturing

throughits

FactoryTalk

softwaresuite,whichintegratesAIfor

productionscheduling,predictivemaintenance,andqualitycontrol.Thecompanyhasalsopartneredwith

NVIDIA

and

Microsoft

todeploydigitaltwinsandedgeAItoolsthataimtoenablereal-time,autonomous

productionadjustmentsacrossfactorysystems.

°WesterncontractmanufacturersarepotentialkeybeneficiariesinaUSagenticmanufacturingre-shoringcycle:Jabil(JBL),Flex(FLEX),

Celestica(CLS),Sanmina(SANM),Plexus(PLXS),BenchmarkElectronics(BHE).NotcoveredbyMSResearch.

Exhibit1:KeyPublic&PrivateCompaniesforthe'Factory=Robot'Theme

Source:CompanyWebsites,MorganStanleyResearch

4

Exhibit2:ElonMusk's5StepDesignProcess

Source:MorganStanleyResearch,VariousinterviewsfromWalterIsaacson'sElonMusk(2023)

Exhibit3:USVentureFundingforManufacturing-RelatedStartupsHasBeenSteadilyIncreasingSince2Q23.

VCFundingRaised

Post-MoneyValuation

$8.0B

$7.0B

$6.0B

$5.0B

$4.0B

$3.0B

$2.0B

$1.0B

$0M

$60M

$50M

$40M

$30M

$20M

$10M

$0M

CapitalInvestedMedianPostValuation

2Q21

3Q21

4Q21

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

3Q25

4Q25

Source:PitchBook,MorganStanleyResearch

ForFurtherReading:

•

RowdyRobot:PhysicalAl:AmericaısChancetoRe-lnventManufacturing(10

Feb2026)

•

PhysicalAl:TheMorganStanleyRobotAlmanac(7Dec2025)

•

USMulti-lndustry:USReshoringFlameHasBeenLitFor$10tnOpportunity

(16Oct2024)

•

Space:VardaSpace:SpaceManufacturing丿PharmaMadeinOrbit(19Feb

2026)

•

Robotics:AgileRobots:DasBot(17Mar2026)

•

Robotics:VulcanForms:MetalsManufacturing丿MadeSimpler(5Feb2026)

•

EmbodiedAl:WorldModels:AlısJourneyfromDigitaltoPhysical(22Mar

2026)

•

RowdyRobot:OpenAlRFPAlignswithRebuildingAmericanManufacturing

Muscle(22Jan2026)

Thecontentaddressingprivatecompaniesisbeingprovidedforinformational

MoRGANSTANLEyREsEARcH5

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purposesonlyanddoesnotconstituteasolicitationorimplyfutureresearch

coverageifthecompanygoespublic.Noinvestmentrecommendationisprovidedasthereislimitedpublicinformationavailableforprivatecompanies.Investorsshouldconducttheirownduediligenceandbeawarethatadditionalordifferentinformation

maybeprovidedbythecompany.

Thevaluationinformationprovidedhereisincludedforillustrativepurposesonly.Theinformationisbasedonpubliclyavailableinformation(fundingrounds,company

disclosure,third-partyvendors,etc.)andwasnotproducedorendorsedbyMorganStanleyResearch.

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TheAgenticManufacturingThesis

CouldNowbetheTimeforaGrounds-UpRethink?Hasmanufacturingbeentruly

6

transformedsincetheFordassemblylinein1913?TheadventofAIiscreatingamomentof'pause'forengineerstore-assessfundamentalrulesthathavebeenlearnedandpasseddownfordecades.Atthesametime,USmanufacturingasa%ofGDPhassteadily

declinedfrom~30%ofGDPinthe1950'sto

<10%today.

Manufacturingasa%ofnon-farmpayrollspaintsasimilarpicture-steadilydecliningto<8%today.

GreenfieldsGalore?AsUSpolicy-makerscontinuetoassesstheriskposedbythe

growingrelianceonforeignmanufacturing,ourUSMulti-Industryteam(ledbyChris

Snyder)

continuestobelieve

theUSisenteringtheearlyinningsofre-Industrialization,amulti-decadeopportunitysizedat~$10tnthatcouldrestoregrowthtotheUSIndustrialeconomy.Whyrebuildwithlast-genmanufacturing?

DarkFactoriesaRedHerring?Robotshavebeenbuildingrobotsfordecades

.In2003,

CNNdocumented

theimpressivelights-outmanufacturing(AKAa'darkfactory')of

JapaneserobotOEMFanucwhererobotarmswereautomaticallyassembledatarateof50perday-nolights,AC,heat….orAI.Veryimpressive.Sowhyisn'tallmanufacturingtoday'lightsout'?Basedonourconversationswithmanufacturingexperts,thetraditionaldarkfactorymodel(whileimpressive)canbeincrediblyrigidwithpotentiallyhundredsofclosed-loopspecializedsystemsthatstillneedtobeindividuallymanaged.Greatifyou're

aworld-classelectronicsmanufacturer,

butotherwiseprepareforalotofprecision

engineering,redesigns,anddebugging.

Manufacturing2040:FactoryHivemind.ImagineasingleAIsystemthatmanaged

everythingfromdesign,procurement,production,andout-boundlogistics-notjustonefactory,buttheentiresupplychain.Everymachineinterconnectedasone.Abottleneckappears?Everythingelseautonomouslyadjusts.Needtobuildanewline?Designsarereadyandequipmentisalreadyontheway-therobotswillassembleit.Runningthinoninventory?Outputistoggledupandmaterialordersareautomaticallyplacedwithan

upstreamfactory-everynodeinthesupplychainreactsaccordingly.Facilitiesreplicatelikecellsinbiologyandwitheroffwhennotneeded.

ManufacturingasaService(MaaS)2.0.Inthisenvisionedfuture,AI-drivennetworkscouldenablecompaniestotapintoanddynamicallyroutedemandtothenecessary

productioncapacity.Demandsignalstriggerautonomousbuild-outs,supplychainsself-configure,andcapacityscalesupordownwithouthumanintervention.

OnHumanoids.Ifthefactoriesaren'tdesignedforhumans-whybuildrobotsthatare

designedtomimiceveryfeatureofhumanmorphology?Tobeclear,wearestilllong-termhumanoidbulls,butovertimethedefinitionofa'humanoid'especiallyinfactorysettingsmayblur.Therewillbemanyinstanceswhereageneralpurposerobotwithhumanor

above-humandexterityplayvitalrolesinthispotentialautonomousmanufacturingfuture.

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Exhibit4:Manufacturingasa%ofTotalUSNonfarmPayrolls45.0%

40.0%

Exhibit5:Manufacturingasa%ofNominalGDP

%ofTotalNonfarmPayrolls

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

4Q25

7.9%

1Q39

1Q42

1Q45

1Q48

1Q51

1Q54

1Q57

1Q60

1Q63

1Q66

1Q69

1Q72

1Q75

1Q78

1Q81

1Q84

1Q87

1Q90

1Q93

1Q96

1Q99

1Q02

1Q05

1Q08

1Q11

1Q14

1Q17

1Q20

1Q23

Source:USBureauofLaborStatistics,MorganStanleyResearch

Exhibit6:MorganStanleyGlobalRobotRevenueProjections(ReachoutforFullModel)

RobotRevenue($Billions)

91

108

139

203

300

2024e

2025e

2026e

2027e

2028e

427

542

818

1,039

1,420

1,880

2,666

3,439

4,516

5,652

7,288

8,773

10,682

12,092

13,850

15,341

17,155

18,886

20,679

22,085

23,737

25,055

2029e

2030e

2031e

2032e

2033e

2034e

2035e

2036e

2037e

2038e

2039e

2040e

2041e

2042e

2043e

2044e

2045e

2046e

2047e

2048e

2049e

2050e

30,000

25,000

20,000

15,000

10,000

5,000

0

HomeRobotics

AutonomousVehiclesLargeVTOLs

SmallDronesHumanoids

IndustrialRobotsProfessionalServiceRobots

Source:MorganStanleyResearchEstimates

Source:BEA,Haver,Shutterstock,MorganStanleyResearch

Exhibit7:DarkFactories:Impressivefeats,butPre-AI

Source:Xiaomi

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TeslaCybercab'sRethinkofAutoManufacturing

8

FormoredetailsontheUSAutoTeam's(ledbyAndrewPercoco)recentvisitofGigaTexas,pleasesee:

TeslaInc:UnlockingtheRobotaxiFlywheel(18Mar2026)

Cybercab-TeslaUshersinAutoManufacturingoftheFuture:Teslaismakingseveralground-breakingchangestothetraditionalautomanufacturingprocesswithitsCybercabproductionlineinAustin.Themanufacturingprocessusesamodular“unboxed”

architecturethatreplacestraditionalbodyinwhite,paint,andsequentialassembly.Thevehicleisbuiltfromfivemajormodules–front,centralbattery,rearcargo,andtwosidemodules–thatareassembledinparallelandlatercombinedbyaframingsystem.Allexteriorpanelsareplasticandproducedviareactioninjectionmolding,withcolorinjecteddirectlyintotheplastic.Thisapproachallowsgreateraccessduringassemblyandreducesfactoryfootprint,largelyduetoeliminatingthepaintshop.Throughthisprocess,Tesla

aimstomeaningfullyreducetherobotaxicoststructureto~$0.30/mile,whichiswellbelowotherrobotaxiandridesharepeers.StartofproductionisstillontrackforApril2026.

•Atypicalautomotiveplanthashundredsofdiscreteproductionstepsfollowingmaterialflowintoaplant(iesteelcoil)intostamping,metal-forming,bodyshop/welding,engine/transmissionmachining,paintshop,powertrainmarriage,wiringharness,triminstallation,finalassembly.

•OurunderstandingisthatmanufacturingofCybercabisachievedinnomorethan20stepsinitsnovel‘unboxed’assemblyprocesswherethecarismadefromtheinsideout.

•Cybercabdoesnothaveasteeringwheel,pedals,mirrorsandmanyothercomponentsthatwouldberequiredforahumanoperatedvehicle.

•Cybercabhasonly2seatsandahighlyspartaninterior(just1screen).

•Cybercab’sstructuralframeismadefrom3pieces(front,rearandcenter)ina

6,500to9,000tonIdragigapress.Thisprocessreplaceshundredsofpartsandthousandsofweldsvs.atypicalcarbodyshop.

•Cybercabdoesnothaveatraditionalpaintshop.Theexteriorofthecarismadefrompolyurethanebodypanelswherethecolorisinjecteddirectlywhenthe

panelsaremolded.

•CybercabusesanadvancedEtherloop(Ethernet-based)architecturewith

integrated48Vpoweranddatatransmission,significantlyreducingthenumberoftraditionalwiringharnessesto~5–7modularbundlesvs.40ormorebundlesinatraditionalcar,savingmultiplekilometersoftotalwiringlengthandcopper

content.

•Teslatargetsaproductioncycletimeof10secondsperCybercabwhichcomparesto60to90secondsforahighvolumeconventionalhuman-drivencar.

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Exhibit8:TeslaCybercabManufacturing

MoRGANSTANLEyREsEARcH9

Source:Tesla

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10

Palantir'sOntologyCreatesDigitalTwinoftheManufacturingEnterprise

FormoredetailsontheUSSoftwareteam'sviewonPalantir'sOntologyasauniqueanddurablemoatsee:

Ontology-WhatIsItandHowDurableofanAdvantageDoesIt

Represent?

Palantir(PLTR)iscoveredbySanjitSingh

Palantir’sOntologyisbestunderstoodasalivedigitaltwinofanenterprise:ittakessiloeddatafromsystemssuchasERP,CRM,databases,sensors,andoperational

documents,andmapsthatdatatothereal-worldentities,relationships,andactionsthatdefinehowabusinessactuallyruns.Inpracticalterms,Ontologycreatesashared

operationalmodelbuiltaround“objects”(forexample,machines,workorders,suppliers,technicians,orproductionlines),theirattributes,thelinksbetweenthem,andthe

governedactionsthatusersorsoftwareagentscantake.Becausethosecoreelementsaretieddirectlytocontinuouslyupdatedsourcesystems,theOntologyisnotastatic

dashboardlayerbutareal-timerepresentationofthebusinessthatmakesiteasiertobuildapplications,automateworkflows,anddeployAIagentsontopofthesame

commondatafoundation.

Formanufacturers,thevaluepropositionisespeciallycompellingbecause

manufacturingenvironmentsaretypicallyasset-heavy,operationallycomplex,andfragmentedacrossmanysystems.

•Ontologycanconnectmachines,maintenancerecords,workorders,inventory,

suppliers,technicians,plantmetrics,andschedulingsystemsintoonegoverned

model,replacingmanualcross-systemreconciliationwithasingleoperationalview.

•Thatallowsplantandoperationsteamstomonitorperformanceinrealtime,

identifyunderperformingequipment,coordinatemaintenance,improveproductiondecisions,andreduce“swivel-chair”workflowsacrossfunctions.

•Justasimportantly,OntologyprovidesthecontextlayerthatletsAIapplicationsandagentsactonliveoperationaldataratherthanstaletrainingsets,with

definedactionboundaries,write-backsintosourcesystems,andfullaudittrails.

•Inthatsense,Ontologyisnotjustadataintegrationlayerformanufacturers;itisanoperationalsystemthatcanhelpunifythefactoryfloorandenterprisebackend,makingproductionenvironmentsmoreautomated,moreintelligent,andmoreresponsiveovertime.

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Exhibit9:OntologyLayerRepresentingaManufacturingCampus

MoRGANSTANLEyREsEARcH11

Source:Palantir

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12

USReshoring$10tnOpportunity

FormorefromourUSMulti-IndustryIndustrialsTeam(ledbyChrisSnyder),pleasesee:

•

Multi-Industry:2026Outlook:RelativeStabilityLayersinCyclicalTorque(6Jan

2026)

•

USMulti-Industry:USReshoringFlameHasBeenLitFor$10tnOpportunity(16Oct

2024)

WebelievetheUSisenteringtheearlyinningsofre-Industrialization,amulti-decadeopportunitythatwesizeat$10tnandbelievewillrestoregrowthtotheUSIndustrialeconomyfollowing20+yearsofstagnation.TheUSReshoringthemealignscloselywithMSThematics'

InvestingforaMultipolarWorld

–underpinningourthesisarestructuraltechadvancementandsharperfocusonoperationalresiliencyafterthepandemicand

subsequentsupplychaindisruption.SinceChinajoinedtheWorldTradeOrganization

(WTO)in2000,theUShaslost9PPofGlobalManufacturingshare(~$1.5tnannual

output),flippingUStradefrombalancedtoa$1tnannualdeficitanddrivingdeclinesinUSManufacturingfixedassetinvestment.Butthetideisturning–since2020,theUSis

attractingforeigndirectinvestment(FDI)ataratenotseensincethe1990sandUS

Manufacturingconstructionhassurged~300%withprojectstartsstabilizingat~3xpre-Covidlevels.Afterdecadesofchasinglowcostlabor,webelievethataccesstocapitalandproximitytoenduserswillnowdrivetheregionalallocationofcapex-parametersto

whichtheUShasnoequal.WhileReshoringisbroadlypositiveforallUSIndustrialsgiventheregionalexposure,ETNandROKareourpreferredstocksonthetheme.

TheUSReshoringflamehasbeenlitandmomentumcontinuestobuild.Theflamewasfirstlitin2018asTrumptariffskickstartedboardroomconversationsaroundglobal

supplychainsforthefirsttimein40yearsandbroughtnoticeablechange.Covidthen

broughtkerosenetotheflamewithhistoriceconomicdisruptiondueinlargepartto

disruptedtradeasthetruecostoflongrigidsupplychainswasrevealed.Thedisruptionandreducedconfidenceinkeytradepartnersleddomesticpolicycenteredaboveallelseonpaddingtheresilienceofthedomesticeconomyandreducingtheriskofsystemic

shocks–furtherfanningtheflames.NowthetorchhasbeenpassedtoTechdiffusion,astructuraltailwindforUSManufacturingwherelatestgenAIadvancementbothbringsdowntheUSManufacturingcostcurvewhilefuelingthenextroundofglobal

protectionism.Theopportunityiscompoundedby25yearsofUSManufacturingunder-investment,leavingbilliondollarcompaniesgoingaftertrillionsofopportunity.

Followingtwodecadesofunder-investmentandstagnation,webelievetheUSisinthe

veryearlyinningsofre-industrialization-amultidecadeopportunitywhichwesizeatover$10T(incrementalIP+Capex).OurUSReshoringthesisisunderpinnedbystructuraltechadvancementandheightenedfocusonoperationalresiliencyfollowingtheCovid

pandemicandsubsequentsupplychaindisruption.GonearethedayswhereGlobalMfgchasedlowcostlabor;movingforward,webelievecapitalandproximitytotheenduserwilldictatetheregionalallocationofcapex-parameterstowhichtheUShasnoequal.

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MoRGANSTANLEyREsEARcH13

Exhibit10:USReshoring:Opportunityfor~$5TincrementalUSMfgOutput($bil,real)

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

2049

2050

Actual,2.5%fwdCAGR(LTavg)Incremental,5%CAGR(neededfor20%globalsharein2050)

Source:USCensusBureau,MorganStanleyResearch.

Exhibit11:USReshoring:Opportunityfor~$6TincrementalUSMfgCapex($bil,real)

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

2049

2050

1,400

1,200

1,000

800

600

400

200

0

Actual,Neededtosupport2.5%LTgrowthNeededtosupport5%LTgrowth,returnto20%globalshare

Source:USCensusBureau,MorganStanleyResearch.

Exhibit12:USIndustrialMachineryOrders(Annual,$mil,Real):Down~50%from2000to2025postChinaWTOinclusion,highlightingtheopportunityathandfromour$10TUSReshoringthesis

Source:USCensusBureau,MorganStanleyResearch

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Exhibit13:WebelievethatduetoUSpurchasingpower(~30%globalconsumption),

companiesmustservetheUSmarketand'LiberationDay'tariffschang