Company history

Before 1917 Japan had almost no optical industry of its own — telescopes, rangefinders and the very glass they needed were all imported. When the First World War severed the supply of German optical instruments, the Imperial Japanese Navy could no longer obtain the rangefinders, binoculars and periscopes its warships depended on, and its fighting strength was suddenly at risk. At the Navy’s urging, Iwasaki Koyata of the Mitsubishi zaibatsu gathered Japan’s scattered civilian optical engineers and in 1917 founded Nippon Kogaku (Japan Optical Industries). Nikon was thus born not from a consumer market but to substitute, for a single demanding customer, for goods a country at war could no longer buy.

Making the instruments meant first making the glass. Nikon absorbed the Fujii Lens works, built its Oi plant in 1918, and spent nearly a decade of trial and failure before it could pull homogeneous optical glass from its furnaces with any consistency — steady mass production came only in 1927. The Navy’s punishing precision requirements deepened the optical craft that would later carry Nikon into civilian markets.

After the 1923 Great Kanto Earthquake, Nikon took over the Army’s and Navy’s optical operations and their engineers, becoming almost the sole maker of Japan’s optical weapons. Through the 1930s it built military plants at Hiratsuka and Mizonokuchi; by the surrender in 1945 it employed some 25,000 people across twenty plants — a vast munitions conglomerate that was also, dangerously, 100% dependent on a single customer and a single kind of demand. That structure would lose its entire market overnight when the war ended.

The surrender wiped out military demand in a single day. Nikon shut nineteen of its twenty plants — keeping only Oi — laid off roughly 20,000 workers, and restarted with just 1,724. It had almost no experience mass-producing finished cameras; wartime Nikon had made lenses and rangefinders, not camera bodies. But civilian survival demanded a finished product, and from 1946 it turned its wartime lens-design and precision-machining skill toward small, high-end cameras built for export — a bet on quality in a country that had, as yet, no serious camera brand.

The break came from the reputation of the glass. Occupation soldiers who saw the resolution and colour of Nikon’s lenses carried them home, and in December 1950 the New York Times reported that a Life photographer covering the Korean War judged the Nikkor lens far sharper than the German optics then taken as the standard. Nikon began volume production of cameras and lenses in 1948 and pushed into exports the next year; as a 1961 trade account put it, where a rival such as Canon chased what would sell and pay, Nikon aimed first at the finest possible product. The discontinuous leap from a giant arms maker to a premium civilian optical brand was, even in postwar industrial history, exceptional.

By the 1960s the camera trade was overcrowded — some fifty makers failed in 1954–55 alone — and the industry’s common answer was to diversify away from cameras. Nikon found its second pillar in an unlikely place. In 1976 it joined the government-led VLSI research consortium, whose purpose was to break Japanese chipmakers’ reliance on American stepper suppliers, and the machine that resulted came not from the camera division but from the sidelined precision-optics group — the engineers who had built ruling engines and Micro-Nikkor lenses, led by Yoshida Shoichiro, whose 1972 laser-interferometer measuring instrument supplied the positioning accuracy a stepper needed.

Nikon shipped its first stepper, the NSR-1010G, in 1980 and began deliveries to NEC and Toshiba in 1981; by giving Japan’s chipmakers the precision and throughput they wanted faster than its American rivals could, it took the world’s No. 1 stepper share in 1983. A 1984 Nikkei Business piece caught the mood — “the Nikon of high-end cameras is becoming the Nikon of semiconductor equipment” — as profits hit records and semiconductor-equipment sales reached $238.7M (¥57bn), a second earnings pillar beside cameras.

The two pillars then grew under opposite pressures. After the 1985 Plaza Accord the surging yen gutted the economics of exporting cameras from Japan; Nikon set up in Thailand in 1990 and over thirty years shifted almost all camera production there. Steppers, meanwhile, held 30–50% of the world market through close co-development with NEC, Toshiba, Hitachi, Fujitsu and Mitsubishi Electric — a formula that ground the machines ever finer on its customers’ demands, and that quietly concentrated Nikon’s fortunes on a customer base clustered in one country. The very intimacy that made the steppers great was already the seed of the weakness that surfaced a decade later.

Through the late 1990s the semiconductor industry’s centre of gravity moved to new Taiwanese and Korean makers — Samsung, TSMC — and the Dutch firm ASML built its development and service around exactly these new customers, eating into Nikon’s share. Nikon, its weight still on its long-standing domestic partners, posted consecutive net losses — $139M (¥18bn) in the year to March 1998, $49.4M (¥6bn) in 2001, $64.7M (¥8bn) in 2002 — even as immersion-ArF lithography pushed line widths toward almost unimaginable fineness.

Where a peer such as Tokyo Electron pivoted its sales toward overseas customers, Nikon kept its centre of gravity on its existing domestic relationships. As share fell, so did the R&D money that share paid for, and Nikon dropped behind in the funding race for next-generation machines — a vicious circle. A 2012 strategic tie-up with Intel could not overturn a market in which ASML now held about 80%. As the battleground moved from immersion-ArF toward EUV, Nikon found itself fighting off the main line, carrying the memory of its former lead — the 1980s winning formula of hugging domestic customers had become, before a redrawn customer map, a constraint.

From the mid-2010s the camera business lost its entry-level market to smartphones and was overtaken on the mirrorless wave that Sony and Canon rode first; even in the professional high-end that had been Nikon’s postwar signature, funding the new-generation bodies — on-sensor phase-detection autofocus, electronic viewfinders — grew harder, and profits slid. With both flagship businesses — lithography and cameras — failing at once, Nikon carried out a company-wide restructuring: 1,143 voluntary redundancies and special losses of about $487M (¥53bn). President Ushida Kazuo paired the cuts with a repeated pledge not to abandon the founding optics-and-precision craft.

Under Umatate Toshikazu, who became president in 2019, Nikon changed how it pursued growth. Where the postwar company had raised its technology hand-in-hand with domestic customers, it now moved to buy businesses outright, setting an M&A war chest of up to $2.3B (¥300bn). But what it bought stayed within optics and precision machining — Optos in retinal cameras, RED.com in cinema cameras, SLM Solutions in metal 3D printing — so the founding technology was never let go, even as the method of growth changed.

The bet has not paid off cleanly. The digital-manufacturing business built around Germany’s SLM Solutions met slowing adoption of metal 3D printers and rising Chinese competition, and in the third quarter of the year to March 2026 Nikon booked an impairment of $584.9M (¥93bn) on it — re-pricing a once-promising growth story in hard numbers. Reorganised into four businesses — imaging, precision equipment, healthcare and components — Nikon is now hunting a new axis of growth and clearing out the unprofitable at the same time, its technology intact but its next pillar still unproven.