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China Is the Global Leader in Robotics Adoption |
NEWS |
China is now the global leader in robotics adoption and will soon be the leading manufacturer. Chinese Original Equipment Manufacturers (OEMs) are active across the entire robotics ecosystem. Industrial robot manufacturers include SIASUN, Guangdong Topstar, and STEP Electric. Han’s Robot, AUBO, and Jaka Robotics are tackling Collaborative Robots (cobots). HITO, Geek+, and Quicktron are strong in the Autonomous Mobile Robot (AMR) space; while DJI controls around 75% of the drone market. Finally, a host of humanoid manufacturers, including Unitree’s US$16,000 robot, are bringing products to market to compete with Western innovators.
The last two economic 5-year plans of the Communist Party of China have focused on producing industrial robots, with the 2021 initiative growing to include humanoids. These plans are coming to fruition and uptake of robotics within China and the volume exported has reached record highs. ABI Research’s Commercial and Industrial Robotics market data (MD-CIROBO-109) indicates that some 40% of global robotics shipments were installed in China in 2023. Chinese OEMs continue to supply both domestic and foreign markets at an accelerating pace.
Incumbent OEMs Feel the Squeeze |
IMPACT |
Chinese robotics manufacturers are both pushing out foreign manufacturers and flooding the global market with low-cost hardware. This is a problem for incumbent OEMs that must absorb the not-insignificant blow of reduced demand from the global manufacturing powerhouse. Looking to the future, vendors will soon find themselves in fierce competition for emerging markets and new contracts. Although incumbent robotics OEMs can fall back on established reputation, a loyal customer base, and experienced Systems Integrators (SIs), survival is based on growth—a net increase in robot installations every year. For many stakeholders, especially in inexperienced emerging markets, the choice of robot will be determined by Capital Expenditure (CAPEX). As with consumer electronics and solar panels, Chinese products can often not be met on price.
For all nations, reshoring initiatives—with the promises of job creation and supply chain security—are embryonic. In reality, the cost of bringing production back to advanced economies at scale, with high salary expectations and the associated reduction in profitability, is likely untenable without lights-out manufacturing. Near shoring—shifting manufacturing to nations, including Mexico and India—is more likely to become the global manufacturing modus operandi. Incumbent OEMs will find themselves in fierce competition with Chinese startups for these emerging markets.
Damming the Deluge |
RECOMMENDATIONS |
Many legacy industrial robot OEMs primarily sell hardware and rudimentary programming software. If industrial robot vendors play only a small part of a manufacturing process, what is to prevent a manufacturer from using a cheaper alternative with the same capabilities? OEMs can learn from each other’s good practices, but innovative thinking will be required if the industrial robotics incumbents wish to continue to grow. Consider the following:
Robotics OEMs believe that industrial manufacturing will remain a growing source of revenue for them in the long term. Accordingly, many incumbent OEMs have a lackluster approach to innovation. The slow adoption of collaborative products, the dearth of partnerships, and the undervaluation of AI are all indicative of this trend. Depending on extant business will only enable a business to survive for so long. Getting ahead of the influx of new robots and methodologies will require an initial outlay, but many low-cost value-adds exist (such as an intuitive Offline Programming (OLP) interface) that can maintain an OEM’s competitive edge. At a certain point, incumbent OEMs will have to ask themselves what price they are willing to pay to avoid extinction.
