China is expected to become the world’s largest single market of industrial robots in 2018, as the country’s Made in China 2025 strategy transitions from vision to reality.
Historically, industrial robotics has been dominated by Japanese and European vendors, while United States and European companies have gained a reputation as market leaders in commercial robotics.
However, analysis by ABI Research indicates Chinese vendors are moving up the value chain in robotics technology.
“The top four Chinese industrial robotics vendors reported a top-line growth of 20 per cent year on year in 2016 and similar figures are expected for the next few years,” ABI Research principal analyst Lian Jye Su said.
“Their Japanese and European counterparts were either contracting or experiencing low-digit growth in the same period.
“Two factors have spurred their growth: China-based warehousing robot companies have been actively expanding their overseas operations and China’s overall heavy push into 5G and AI.”
ABI Research has predicted China to become the world’s biggest market for industrial robots later this year, with total shipments of more than 134,000.
The rise of China’s robotics suppliers has been driven largely by a 2015 commitment by the Chinese government to raise the stature and quality of the country’s manufacturing sector.
Part of the strategy is development of the robotics industry, for which the Chinese government released guidance in 2016.
Following that commitment, Chinese companies have made heavy investments in research and development, with Shanghai Siasun and Geek+ among the market leaders.
Other major players include Shanghai Step Electric, Estun and Guangdon Topstar Tech.
However, ABI Research’s analysis indicated Chinese suppliers were still lagging European, Japanese and American counterparts in terms of key components.
“Chinese robotics vendors are still sourcing key components from international companies,” Ms Su said.
“Top reduction gear vendors, for example, mainly come from Japan, while German firms have been in the leading position of gripper and machine vision technology.
“Meanwhile US startups have been introducing innovative solutions in actuator, LiDAR and soft material handling.
“All these key components are essential to the competitive advantage and cost margin of robotics manufacturers.
“There will be a long road ahead before Chinese robotics suppliers fully develop in-house solutions but given what we have observed from other technology sectors, it is a matter of when, not if.”
The rapid rise of robotics is indicative of the effects of the Made in China 2025 strategy, which has also resulted in the country moving into second position globally in terms of international patent applications filed through the World Intellectual Property Organisation in 2017.
Technology companies Huawei and ZTE were the top-ranked companies worldwide in patent applications in 2017, the WIPO said.
WIPO director general Francis Gurry said China would likely overtake the US as the largest source of patent applications within three years.
Patent applications in China have grown at an annual rate of more than 10 per cent every year since 2003.
“This rapid rise in Chinese use of the international patent system shows that innovators there are increasingly looking outward, seeking to spread their original ideas into new markets as the Chinese economy continues its rapid transformation,” Mr Gurry said.
“This is part of a larger shift in the geography of innovation, with half of all international patent applications now originating in East Asia.”
China is also moving to develop its domestic semi-conductor market, as the fallout from the trade war posturing with the US filters throughout industry.
International news agency Reuters reported that senior Chinese officials met recently with industry bodies, regulators and the country’s powerful chip fund about accelerating plans to develop the sector.
China’s reliance on imported microchips from manufacturers such as Qualcomm and Intel has caused concerns, exacerbated by the trade dispute with the US.
The semi-conductor market was a key priority under the Made in China 2025 strategy, with 40 per cent of all smartphones in China to feature locally-made chips by 2025.
However, a US ban on the sales of technology products, including microchips, to ZTE has given the goal fresh urgency, Reuters said.
E-commerce giant Alibaba Group recently acquired Chinese microchip manufacturer Hangzhou C-SKY Microsystems late last month, as it seeks to develop its cloud-based internet of things business.
Terms of the acquisition were not disclosed, however, Alibaba had previously invested in Hangzhou C-SKY to advance its microchip ambitions.