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China's Manufacturing Upgrade Brings a Huge Robot Market Opportunity
发布日期：2021.11.12 类别：Industry News
Based on the application environment, Chinese robot experts categorize robots into two main types: industrial robots and special-purpose robots. Industrial robots refer to multi-joint manipulators or multi-degree-of-freedom robots oriented toward the industrial field. Special-purpose robots are advanced robots used in non-manufacturing sectors to serve humans, including service robots, underwater robots, entertainment robots, military robots, agricultural robots, and robotized machinery. Some branches of special-purpose robots, such as service, underwater, military, and micro-manipulation robots, are developing rapidly and trending toward independent systems. Luo Baihui, a global robot industry investment analyst, points out that the industry supply chain consists of five parts: R&D, component production, robot body manufacturing, system integration, and after-sales service. Among these, robot bodies, system integration, and after-sales service constitute the full lifecycle components of production, sales, maintenance, and disposal. Luo Baihui's research found that these three segments share the profits of a robot's lifecycle. Following international practice, the gross profit margin of a robot's full lifecycle is approximately 60%, making it true high-end equipment. Body manufacturing, integration, and service each account for about one-third. Therefore, a longer coverage of the supply chain leads to stronger profitability. If a manufacturer only covers the integration segment, the gross profit margin is only about 20%.
Competition in the Chinese Robot Industry
(I) Traditional Large Enterprises Entering the Arena
On August 22, 2015, at the Zhuhai International Convention and Exhibition Center, two lions—one red and one yellow—outfitted in traditional Foshan folk lion dance costumes, moved rhythmically to majestic music. The two lions were perfectly symmetrical, performing every movement with precision before returning to their original positions. These "lions" were actually two ABB robot bodies, valued at over 500,000 RMB each, modified with an additional investment of hundreds of thousands of RMB.
The company that spent over a million RMB to create this lion dance was Foshan-based Lexy (Lixunda). This robot enterprise is well-known domestically as a high-tech firm specializing in industrial robot application system integration and intelligent industrial equipment.
Lexy has established strategic partnerships with Switzerland's ABB and Italy's Comau. Lexy's complete robot systems can automatically polish irregular and delicate items like guitar bodies and golf club heads. However, at the first West Bank of the Pearl River Advanced Equipment Manufacturing Investment and Trade Fair (hereinafter referred to as "the Fair"), the company still chose the lion dance—the most common folk symbol in Lingnan celebrations—to express its spiritual identity.
Luo Baihui pointed out that robots have gained public attention in China alongside the urgent need for manufacturing transformation in recent years, carrying high hopes for labor replacement and the elevation of manufacturing and industrial levels. Along with the term itself, industry realities have become known: the market is dominated by four international giants, domestic robots have low technical content, and both acquisition and maintenance costs are high.
Under this trend, robot industrial parks have emerged across the country, equipment manufacturing companies have shifted to robot production, and manufacturing firms are racing to implement "machine-for-human" replacements. Represented by Gree and Midea Group, many traditional manufacturers have invested in purchasing or independently developing intelligent equipment to cope with rising labor costs. The difference is that SMEs usually only have the capacity to purchase, while large enterprises have the capacity for R&D. Regional benchmarks like Gree and Midea usually go further under government guidance, investing heavily to seize a market share.
International robot giants naturally will not ignore the huge market opportunity brought by China's manufacturing upgrade. Policies such as introducing major projects to upgrade technology ("market for technology") and subsidies for "machine-for-human" replacement have added fuel to the industry's fire. The "Big Four" (ABB of Switzerland, FANUC of Japan, Yaskawa Electric of Japan, and KUKA of Germany) arrived promptly, followed by other giants. In the "Six Cities and One District" of the West Pearl River, almost every equipment manufacturer and local official is familiar with the "Big Four."
However, due to a lack of core technology and the need to improve profitability, several listed companies' robot merger and acquisition plans "failed" in 2015. Many robot companies still struggle to survive without government subsidies.
Taking Shunde, where the robot industry is advanced, as an example: in the first half of 2015, Yaskawa Electric invested 1 billion RMB to develop motor robot projects with Midea; ABB collaborated technically with Lexy; KUKA built an engineering center in the Sino-German Industrial Service Zone; and Kawasaki Heavy Industries partnered with Longshen to set up a training center. The entry of international giants also led to the settlement of over 10 robot projects, such as Kekada high-voltage line robots. Consequently, 57 large-scale industrial enterprises in Shunde promoted robot applications in the first half of the year.
(II) Increased Investment by Enterprises
On August 4, 2015, Midea announced its robot industry strategy and established two joint venture subsidiaries with Japan's Yaskawa Electric, targeting industrial robots and service robots respectively.
Guangdong Yaskawa Midea Industrial Robot Co., Ltd. had a total investment of 200 million RMB and a registered capital of 100 million RMB, with Midea contributing 49% in cash. Guangdong Midea Yaskawa Service Robot Co., Ltd. also had a total investment of 200 million RMB and a registered capital of 100 million RMB, with Midea contributing 60.1% in cash.
At the same time, Gree opened its automated production workshops to the press at the first Fair, high-profilely disclosing the latest progress of its independently developed robots. Gree aims to achieve full automation in equipment manufacturing within five years.
On the automated stamping line of the sheet metal spraying factory, a row of orange six-axis robots stood in formation, flexibly waving their "arms" to grab components. These robots are from Switzerland's ABB Group, but the production line, consisting of robots and related equipment, was independently designed and developed by Gree. While the robot bodies were purchased externally, the core content of the integration solution was done by Gree itself.
Since implementing "machine-for-human" replacement in 2011, Gree has established an Automation Office, Automation Technology Research Institute, and Automation Equipment Manufacturing Department, with a total of about 2,000 personnel. Gree aims to reach world-class levels in equipment manufacturing within five years.
Currently, Gree has independently developed nearly 100 types of automated products, covering over 10 fields such as industrial robots, intelligent AGVs, injection molding manipulators, and large automated lines, with more than 20 design patents. As of December 31, 2014, the Automation Equipment Manufacturing Department has produced 1,660 units of equipment and 1,482 sets of tooling.
Both Gree and Midea have ventured into the robot industry clearly because they see the massive market potential.
According to the International Federation of Robotics (IFR), China became the world's largest market in 2013 with 37,000 industrial robots sold. In 2014, domestic sales reached 56,000 units, a 51% year-on-year increase. Based on the density of industrial robots per 10,000 employees, China's total demand in the industrial robot field is expected to reach nearly 3 million units in the future.
In Shunde's "South China Intelligent Robot Innovation Research Institute," Midea is a founding member and has established a wholly-owned subsidiary for robot industry development with a registered capital of 1 billion RMB.
(III) All of the "Big Four" Have Landed
Local officials in the "Six Cities and One District" of the West Pearl River are almost all familiar with the "Big Four." Officials in Zhuhai, Foshan, and Shunde are particularly knowledgeable when discussing robots. Against the backdrop of the "Made in China 2025" initiative and increasing pressure for industrial transformation, local governments are accelerating the implementation of "machine-for-human" replacement plans.
Competition in the Chinese Robot Industry
(I) Traditional Large Enterprises Entering the Arena
On August 22, 2015, at the Zhuhai International Convention and Exhibition Center, two lions—one red and one yellow—outfitted in traditional Foshan folk lion dance costumes, moved rhythmically to majestic music. The two lions were perfectly symmetrical, performing every movement with precision before returning to their original positions. These "lions" were actually two ABB robot bodies, valued at over 500,000 RMB each, modified with an additional investment of hundreds of thousands of RMB.
The company that spent over a million RMB to create this lion dance was Foshan-based Lexy (Lixunda). This robot enterprise is well-known domestically as a high-tech firm specializing in industrial robot application system integration and intelligent industrial equipment.
Lexy has established strategic partnerships with Switzerland's ABB and Italy's Comau. Lexy's complete robot systems can automatically polish irregular and delicate items like guitar bodies and golf club heads. However, at the first West Bank of the Pearl River Advanced Equipment Manufacturing Investment and Trade Fair (hereinafter referred to as "the Fair"), the company still chose the lion dance—the most common folk symbol in Lingnan celebrations—to express its spiritual identity.
Luo Baihui pointed out that robots have gained public attention in China alongside the urgent need for manufacturing transformation in recent years, carrying high hopes for labor replacement and the elevation of manufacturing and industrial levels. Along with the term itself, industry realities have become known: the market is dominated by four international giants, domestic robots have low technical content, and both acquisition and maintenance costs are high.
Under this trend, robot industrial parks have emerged across the country, equipment manufacturing companies have shifted to robot production, and manufacturing firms are racing to implement "machine-for-human" replacements. Represented by Gree and Midea Group, many traditional manufacturers have invested in purchasing or independently developing intelligent equipment to cope with rising labor costs. The difference is that SMEs usually only have the capacity to purchase, while large enterprises have the capacity for R&D. Regional benchmarks like Gree and Midea usually go further under government guidance, investing heavily to seize a market share.
International robot giants naturally will not ignore the huge market opportunity brought by China's manufacturing upgrade. Policies such as introducing major projects to upgrade technology ("market for technology") and subsidies for "machine-for-human" replacement have added fuel to the industry's fire. The "Big Four" (ABB of Switzerland, FANUC of Japan, Yaskawa Electric of Japan, and KUKA of Germany) arrived promptly, followed by other giants. In the "Six Cities and One District" of the West Pearl River, almost every equipment manufacturer and local official is familiar with the "Big Four."
However, due to a lack of core technology and the need to improve profitability, several listed companies' robot merger and acquisition plans "failed" in 2015. Many robot companies still struggle to survive without government subsidies.
Taking Shunde, where the robot industry is advanced, as an example: in the first half of 2015, Yaskawa Electric invested 1 billion RMB to develop motor robot projects with Midea; ABB collaborated technically with Lexy; KUKA built an engineering center in the Sino-German Industrial Service Zone; and Kawasaki Heavy Industries partnered with Longshen to set up a training center. The entry of international giants also led to the settlement of over 10 robot projects, such as Kekada high-voltage line robots. Consequently, 57 large-scale industrial enterprises in Shunde promoted robot applications in the first half of the year.
(II) Increased Investment by Enterprises
On August 4, 2015, Midea announced its robot industry strategy and established two joint venture subsidiaries with Japan's Yaskawa Electric, targeting industrial robots and service robots respectively.
Guangdong Yaskawa Midea Industrial Robot Co., Ltd. had a total investment of 200 million RMB and a registered capital of 100 million RMB, with Midea contributing 49% in cash. Guangdong Midea Yaskawa Service Robot Co., Ltd. also had a total investment of 200 million RMB and a registered capital of 100 million RMB, with Midea contributing 60.1% in cash.
At the same time, Gree opened its automated production workshops to the press at the first Fair, high-profilely disclosing the latest progress of its independently developed robots. Gree aims to achieve full automation in equipment manufacturing within five years.
On the automated stamping line of the sheet metal spraying factory, a row of orange six-axis robots stood in formation, flexibly waving their "arms" to grab components. These robots are from Switzerland's ABB Group, but the production line, consisting of robots and related equipment, was independently designed and developed by Gree. While the robot bodies were purchased externally, the core content of the integration solution was done by Gree itself.
Since implementing "machine-for-human" replacement in 2011, Gree has established an Automation Office, Automation Technology Research Institute, and Automation Equipment Manufacturing Department, with a total of about 2,000 personnel. Gree aims to reach world-class levels in equipment manufacturing within five years.
Currently, Gree has independently developed nearly 100 types of automated products, covering over 10 fields such as industrial robots, intelligent AGVs, injection molding manipulators, and large automated lines, with more than 20 design patents. As of December 31, 2014, the Automation Equipment Manufacturing Department has produced 1,660 units of equipment and 1,482 sets of tooling.
Both Gree and Midea have ventured into the robot industry clearly because they see the massive market potential.
According to the International Federation of Robotics (IFR), China became the world's largest market in 2013 with 37,000 industrial robots sold. In 2014, domestic sales reached 56,000 units, a 51% year-on-year increase. Based on the density of industrial robots per 10,000 employees, China's total demand in the industrial robot field is expected to reach nearly 3 million units in the future.
In Shunde's "South China Intelligent Robot Innovation Research Institute," Midea is a founding member and has established a wholly-owned subsidiary for robot industry development with a registered capital of 1 billion RMB.
(III) All of the "Big Four" Have Landed
Local officials in the "Six Cities and One District" of the West Pearl River are almost all familiar with the "Big Four." Officials in Zhuhai, Foshan, and Shunde are particularly knowledgeable when discussing robots. Against the backdrop of the "Made in China 2025" initiative and increasing pressure for industrial transformation, local governments are accelerating the implementation of "machine-for-human" replacement plans.
