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Editor’s Notice: Georg Stieler will probably be discussing the state of the Chinese language robotics market throughout RoboBusiness 2023, which takes place Oct. 18-19 in Santa Clara, Calif. His speak, “Robotics in China,” takes place from 2:45-3:30 on Oct. 18 and can present insights into the most recent developments in robotics in China and what might be anticipated from there sooner or later. Register for RoboBusiness.
The state of affairs in robotics and automation in China has by no means been as thrilling as in the present day. Final yr, over half of all industrial robots worldwide had been bought within the nation. Within the first six months of 2023, the upward pattern continued: In accordance with our calculations, the variety of industrial robots bought throughout this era was 144,288 models, a rise of 17.1% in comparison with the earlier yr.
The Chinese language market is now setting important traits in industrial automation. What initially emerged within the manufacture of digital merchandise is constant in electrical automobiles, batteries, and photovoltaics. Because the nation is main in these areas, native firms profit from corresponding economies of scale and studying results.
Main progress drivers
Whereas the height in commissioning new manufacturing capacities for electrical automobiles has handed, initiatives on this space are nonetheless liable for most robotic gross sales. Crucial gross sales section within the years earlier than 2022, the manufacture of digital merchandise, is affected by restrained shopper demand domestically and the relocation of enormous capacities to Southeast Asia. This yr’s major progress drivers are robots in manufacturing photo voltaic panels and battery cells – functions that don’t exist or solely exist to a restricted extent in Europe and the U.S. Market observers anticipate that the manufacturing capability for photo voltaic panels will greater than double from 380 GW in the beginning of 2022 to 750-800 GW by the tip of this yr. Storage services close to wind or photo voltaic parks are establishing themselves as a further gross sales marketplace for battery cells.
In recent times, home producers have more and more penetrated areas beforehand reserved for international robotic producers. For instance, final yr, the main home producer of multi-axis industrial robots, Estun, bought over 17,000 robots in China, fewer than Fanuc and KUKA, however already greater than ABB and Yaskawa. Within the SCARA space, Inovance has massively taken market share from Epson and Yamaha. Vital causes for the success of Chinese language newcomers had been supply delays from worldwide market leaders and the power to rapidly adapt to new market traits and develop scalable options for progress fields.
The good significance that the Chinese language authorities attaches to broad STEM training is bearing fruit. In comparison with Europe, extra specialists can be found on the developer and system integrator sides. Along with the native provide chain that has emerged in recent times, this allows shorter product cycles and drastically cheaper prices for machine imaginative and prescient, industrial robots, and collaborative robots.
Main international firms are additionally more and more counting on the native provide chain. KUKA opened the second enlargement stage of the brand new manufacturing facility in Shunde on the finish of Might. The plant is the most important robotic manufacturing website in southern China. FANUC accomplished the enlargement stage of its Shanghai plant in July. It’s the most outstanding website for the corporate exterior of Japan.
Results of weak Chinese language economic system
The pattern that Chinese language producers try overseas as a result of brutal value competitors continues. Cobot producers JAKA, Dobot, and Aubo every plan to go public. JAKA needs to boost 750 million RMB on this manner. An excellent a part of this will probably be invested in worldwide enlargement. To hedge towards growing geopolitical dangers, Chinese language element producers are constructing manufacturing websites in Southeast Asia, Europe, and North America. For instance, Leaderdrive, one of many main home servo and robotic gear producers, invests in capability in Mexico.
Credit score: Stieler Database
Nevertheless, even robotics can’t escape the present weak spot of the Chinese language economic system. In accordance with our surveys, there have been 95 financing transactions within the robotics sector within the first six months of the present yr, with a complete quantity of 8.655 billion RMB. Most of this went into drones, machine imaginative and prescient, and medical robots, adopted by investments in key parts and multi-axis robots. The entire quantity is 33% under the identical interval final yr and suits right into a usually declining pattern in enterprise capital transactions. Throughout all industries, these fell by 42% in Asia within the H1 2023. For robotics, China is thus behind the USA (1.48 billion USD) however considerably increased than the worth we documented for corresponding financing actions within the EU (650 million USD).
Contemplating the prospects for robotic gross sales, there are vital challenges forward: Fanuc reported unprecedented stock ranges in China on the finish of July. The corporate didn’t talk detailed figures for the robotic division, however the complete orders of the group within the nation fell by 42% in comparison with the earlier yr. In accordance with Kenji Yamaguchi, President and CEO, the corporate doesn’t anticipate a normalization of order intakes earlier than 2024, presumably even later. The numbers for different heavyweights within the trade in China went in the identical route: Yaskawa’s orders in China fell group-wide by 27% within the second quarter, and ABB’s within the robotic section by 37%. Leaderdrive’s gross sales fell by 44% within the first six months of the present yr.
Based mostly on the financial knowledge from August, this may increasingly not but symbolize the bottom level. The adjustment course of is prone to be tough and will current existential challenges for a lot of much less environment friendly firms.
Since we started our operations in China, we’ve got noticed related developments in different industries. For instance, a consolidation course of started within the development equipment trade after the increase from 2007-2012. Main Chinese language firms like SANY have emerged stronger from this and now have their prices and processes underneath management. They will deal with demand fluctuations effectively and have additionally developed into critical rivals for established European and American firms on the worldwide market.
Robots within the manufacturing of photo voltaic cells and modules at Jinko Photo voltaic.
A shiny future stays
In robotics, we anticipate an analogous improvement. China will stay the most important marketplace for robotics and automation merchandise for the foreseeable future. Now we have already talked about the strengths in main gross sales markets corresponding to electrical automobiles, batteries, and photovoltaics. The nation now has a robust provide chain for many key robotics parts. The demographic challenges require using extra robots.
A powerful robotic trade is an integral a part of the modernization efforts of the Chinese language authorities, and main firms will proceed to take pleasure in corresponding assist. In August, the Beijing metropolis authorities arrange a associated fund to be geared up with 10 billion RMB. Within the medium time period, extra environment friendly AI will considerably increase the vary of functions. Huawei based a robotics subsidiary in June for this goal, outfitted with 870 million RMB in registered capital.
Regardless of geopolitical tensions, we’re receiving inquiries from European firms within the robotics sector on the right way to use the Chinese language provide chain for themselves – for the native market and different areas. Relying on the product, the native ecosystem’s price benefits, flexibility, and pace are too engaging.
Concerning the Creator
Georg Stieler based the Shanghai department of Stieler Know-how & Advertising and marketing Consulting in 2011. He has since applied over 40 market entry and enlargement initiatives in China along with his native staff, primarily for international firms in robotics, sensors, management know-how, and software program. This has given him intensive experience within the Chinese language automation trade, and he’s now thought-about one of many main specialists on this discipline. He’s additionally concerned with younger know-how firms and helps them acquire a foothold within the Asian and European markets.
