Registered users can unlock up to five pieces of premium content each month.
China Manufacturing Sector in a Healthy State |
NEWS |
The growth of the manufacturing sector in China continues with a steady pace. The country’s manufacturing purchasing managers’ index (PMI) for the month of January 2018 is 51.3%. Despite being down 0.3% from the previous quarter, PMI has never dipped below 50% since December 2016, a trend indicative of both strong global consumer demands for manufactured goods and opportunities for upgrade and transformation in the manufacturing industry.
Being aware of the country’s depleting demographic dividend and the continual rise of average wages, China released Made In China 2025, a masterplan for the country’s transition into smart manufacturing practices. Under the masterplan, artificial intelligence, smart hardware, additive manufacturing, robotics, and 5G are identified as the five key domains that will further propel the advancement of smart manufacturing.
Strategic Guidance from the Top |
IMPACT |
The country is the first to acknowledge its weak position in robotics technology, especially in industrial robotics. DJI is leading in commercial and consumer drones and Ecovacs is gaining a lot of momentum in robot vacuum market. However, if a manufacturer is looking for an industrial robot at the moment, major European and Japanese vendors, such as ABB, Fanuc and KUKA, usually come on mind. The major vendors have well-established supply chain and distribution channels, and possess patents in high-precision reduction gear, servo motor, and controller. China is the world’s largest single market for industrial robots, with total shipments of 134,000 in 2018, according to ABI Research’s Commercial and Industrial Robotics. At the moment, ABB, Epson, Fanuc, Kawasaki, KUKA and Yaskawa have over 65% market share in combination in China.
In order to address the lack of competitiveness in domestic industrial robotics vendors, China released its Guidance for the Development of the Robotics Industry for 2016 to 2020, highlighting ten key robotics products and five key components that the government wishes to focus on. Out of the ten robotics products, five of them, namely arc welding robot, fully autonomous and programmable industrial robot, collaborative robot, two-armed robot, and heavy load automatic guided vehicle, are industrial robots. Particular focus has been given to articulated robot with minimum six degree-of-freedom, a weight-to-strength ratio less than 4, position accuracy and repeatability of 0.05 millimeters.
At the same time, in order to further complement the advancement of robotics technology, the government has also urged robotics suppliers to innovate in the domains of high precision reduction gear, servo motor and drive system, controller, sensors, and effector. For example, large-stroke gripper with over 50 milimeters per jaw and a gripping force of over 30 Newton, currently manufactured by gripper vendors, such as Schunk and Robotiq, are in high demand in computer, communication, and consumer electronic manufacturing.
Rise of the New Challengers? |
RECOMMENDATIONS |
The Chinese government envisions domestic industrial robot suppliers to ship over 100,000 industrial robots by 2020, with over 50% of them to be 6-axis robots. This means Chinese suppliers will account for 20% of the global shipment by ABI Research’s estimate. While the entire domestic robotics industry is currently playing catch-up, major Chinese industrial robotics vendors are growing at a fast pace. By the end of 2016, top four Chinese industrial robotics vendors, namely Shanghai Step Electric, Shanghai Siasun, Estun, and Guangdong Topstar Tech, reported a combined revenue of US$450 million in robotics business segment, up 260% compared to the previous year.
In comparison, the combined revenue of ABB, Fanuc, KUKA, and Yaskawa in 2016 is US$5.4 billion. Nonetheless, the Chinese suppliers are performing well and revenues are expected to grow again in 2018. The companies attribute their robust performance to their continual investments in R&D and strong growth in domestic car manufacturing sector, especially in the arc welding application. As compared to their overseas counterparts, the domestic suppliers target small and medium-sized manufacturers that are cost sensitive and have relatively low-performance requirements. Not to be outperformed by their overseas counterparts, Shanghai Siasun has also debuted a dual-arm, 7-axis collaborative robot.
On the other hand, major enterprises are also actively investing in robotics technology. Major e-commerce vendors, such as Alibaba and JD.com, opt to develop material handling robotics solution using in-house R&D. Midea, a major consumer electronics brand, has acquired KUKA and Servotronix, an Israel-based servo motor supplier. Given that the Chinese robotics market is likely to grow at a CAGR of 14.4% until 2025 based on ABI Research’s forecast, this provides an alternative revenue stream for Midea while the company faces cut-throat competition in consumer electronics.
In a nutshell, the tales of Chinese industrial robots is an outcome of strong government push and heavy investments in R&D by the companies. As China continues to find new ways to grow in the absence of demographic dividends, robotics is the area where the country is trying to target. At the moment, many of the clients of Chinese suppliers are local manufacturers, but as the advancement in proprietary controller system, reduction gear equipment, and machine vision systems, ABI Research believes that the Chinese suppliers will become key players in the world stage, very much like the emergence of Chinese smartphone and telecommunications equipment providers. Now is the right time to be bullish about Chinese industrial robotics suppliers.