The year 2023 began with a continued downturn in the end-user market, and this chill swept through the robotics industry.
The current global political and economic situation is complex and volatile. my country's industrial production and economic operations continue to face significant pressure. Slowing downstream demand has led to insufficient manufacturing output, and the robotics industry has been affected to varying degrees.
Data from the Gaogong Robotics Industry Research Institute (GGII) shows that in the first three quarters of 2023, sales of industrial robots in the Chinese market reached approximately 233,800 units, a year-on-year increase of 6.21%. GGII predicts that total sales of industrial robots in the Chinese market for 2023 will reach approximately 316,000 units, a year-on-year increase of 4.29%.
From a corporate perspective, the Matthew effect continues to intensify. On the one hand, leading manufacturers maintain their growth momentum, further expanding their scale advantages; on the other hand, many small and medium-sized enterprises face increasing pressure and challenges in terms of orders, funding, and supply chains.
So, what are the characteristics of the robotics industry this year?
The Humanoid Robot Craze
This year, the humanoid robot craze has intensified. Following Tesla's announcement of the latest progress on its Optimus humanoid robot, humanoid robots have sprung up globally, with companies like iFlytek and XPeng Motors launching their own humanoid robot products.
Amidst this hype, humanoid robots have attracted close attention from capital and the industry chain.
In the investment world, capital is betting heavily on humanoid robots as a future sector. For example, Meituan invested in Galaxy General Robotics, and Baidu and BYD invested in Zhiyuan Robotics. Meanwhile, UBTECH, a veteran player in the industry, has also garnered attention, with Tianqi Shares establishing a joint venture subsidiary targeting the automotive application field. Notably, UBTECH also launched its IPO this year, aiming to become the "first humanoid robot stock," submitting its prospectus to the Hong Kong Stock Exchange and expecting to list on January 5, 2024.
Fueled by frequent positive news, stocks related to humanoid robots continued to rise, with listed companies such as Zhongda Lide, Buke Electric, Lizhi Intelligent, Yuanda Intelligent, Bai'ao Intelligent, Zhongwei Electronics, Saiwei Intelligent, Allwinner Technology, and Mingzhi Electric experiencing significant gains.
Several listed companies have signaled their involvement in the humanoid robot sector, conveying information through interactive platforms and other channels that they have already participated in or are capable of participating in related aspects of humanoid robots. These include companies such as Haozhi Electromechanical, Buke Electric, Robot, Junpu Intelligent, Tuopu Group, Orbbec, Luxshare Precision, Sanfeng Intelligent, Jiangsu Leili, and Boshi Shares.
From a policy perspective, various regions across the country have successively released robot-related industrial policies. Notably, the Ministry of Industry and Information Technology mentioned humanoid robots three times within six months (September, November, and December), clearly indicating a clear policy direction.
For example, the "Guiding Opinions on the Innovative Development of Humanoid Robots" released by the Ministry of Industry and Information Technology on November 2nd stated that humanoid robots integrate advanced technologies such as artificial intelligence, high-end manufacturing, and new materials, and are expected to become disruptive products following computers, smartphones, and new energy vehicles.
GGII predicts that by 2026, the penetration rate of humanoid robots in service robots worldwide is expected to reach 3.5%, with a market size exceeding $2 billion. By 2030, the global market size is expected to exceed $20 billion.
Strong Demand for High-Payload Robots
Looking at this year, "high-payload" remains a highlight among the new products launched by both traditional industrial robot and collaborative robot companies. With the rise of the lithium battery and new energy vehicle industries, the demand and application scenarios for high-payload robots are expanding simultaneously.
For traditional industrial robots, the demand for six-axis robots with a payload of over 100kg remains very strong. Many domestic manufacturers, including STEP Robotics, Peitian Robotics, Estun Robotics, Huashu Robotics, EFORT, Canopy, Guangzhou CNC, and Luoshi Robotics, are focusing on product development and entering the high-payload six-axis robot market to gain a share.
High-payload SCARA robots are also gaining popularity. Companies like Estun and Haifeng Robotics are continuously investing in high-payload SCARA robots.
Collaborative robots have entered a new stage of market development. To meet customer needs, collaborative robots are becoming increasingly "industrialized"; in terms of payload capacity, they are increasingly trending towards products with large payloads and long reach. Collaborative robot players such as Siasun, Yuejiang Robotics, Luoshi Robotics, Elite Robotics, and Han's Robotics launched high-payload collaborative robots in the first half of this year. With technological iteration, the payload range of collaborative robots has evolved from 3kg to 25kg; reach has also increased, expanding from 618mm to 2000mm.
For example, Siasun's GCR25-1800 is the largest payload member of the DUCO® collaborative robot G series, with an effective working radius of 1800mm. The GCR25-1800 can grasp 25kg items and boasts an 1800mm reach, making it perfectly suited for heavy material handling and palletizing applications. Equipped with a new control cabinet, its size is reduced by 30% compared to the original, giving the GCR25 exceptional flexibility and making it ideal for use in confined spaces.
Leading companies remain strong.
Following Estun and Inovance Technology, whose shipments exceeded 10,000 units, Eft has also crossed the "10,000-unit" threshold. In a sense, Eft's achievement of becoming a "10,000-unit player" brings a glimmer of hope to the robotics industry.
This year, affected by sluggish end-user demand, the robotics industry as a whole has been sluggish, with slower growth. Companies that initially planned aggressive expansion have, after experiencing a market downturn and sluggish growth in the first three quarters, shown a tendency to adopt a "laissez-faire" approach.
Unlike some mid-sized and smaller companies that have been forced to "lay low," leading companies such as Estun, Eft, Inovance Technology, Siasun, and Topstar are showing strong momentum and continuing to forge ahead through alternative paths.
For example, Estun's products have maintained high growth rates in the photovoltaic and new energy vehicle industries, and its subsidiary Cloos has also maintained good overall business growth, securing numerous North American orders and maintaining a sufficient order backlog. This year, Inovance Technology officially completed its acquisition of South Korea's SBC, adding a precision linear guide product line. Except for the gearbox, which still needs to be outsourced, all other core components are now manufactured in-house. Siasun invited Liang Rui, the former head of ABB Robotics China, to officially join the company this year, focusing on the automotive industry and achieving significant growth in the first half of the year. Topstar focuses on industrial robots+, with its multi-joint industrial robot business showing impressive growth.
In addition, another group of companies, facing high costs, few and unstable orders, and increasing difficulty in acquiring orders, have accurately identified key sectors (new energy vehicles, photovoltaics, lithium batteries, etc.) and are frequently securing orders.
For example, Elite Robotics secured a large order for 3,000 domestically produced six-axis collaborative robots from a leading electronics, automotive, and new energy company; Julun Intelligent signed a strategic cooperation agreement with Moka Robotics, with Moka Robotics planning to purchase approximately 50,000 RV reducers from Julun Intelligent in batches, with the first batch consisting of approximately 3,000 sets.
GGII stated that leading manufacturers will continue to benefit from the rapid development of the new energy industry and new energy vehicles, while the Matthew effect will intensify, leading manufacturers will also experience differentiation; orders for mid-sized and lower-tier manufacturers have shrunk significantly, and they still need to wait for a full recovery in the general industrial and lower-tier markets.
Capital Heats Up for Core Components
This year, the core component industry has seen increased activity in the capital market. In the first three quarters, there were 64 financing cases in the robotics industry, averaging 0.62 billion yuan per case. Among them, core components accounted for 16 cases, representing 25% of the total financing.
The trend of domestic substitution for key core components of robots is unstoppable. More and more domestic robot companies are beginning to use domestic reducer brands in batches, and many strong domestic brands have emerged in the servo motor and drive fields, providing support on the robot supply side. Meanwhile, castings, cables, and machined parts can already be largely produced and supplied locally. With increased capital investment, the localization process of core components, such as reducers, servo drives, and controllers, is expected to accelerate.
In parallel with the rising capital investment, core component manufacturers have also seen a wave of investment and capacity expansion this year.
Regarding investment, for example, Zhongda Lide plans to establish a wholly-owned subsidiary, Singapore Zhongda Lide Intelligent Transmission Co., Ltd., in Singapore, and a wholly-owned subsidiary, Thailand Zhongda Lide Intelligent Transmission Manufacturing Co., Ltd., in Thailand; Green Harmonic and Sanhua Intelligent Control will jointly invest in a joint venture in Mexico.
Regarding capacity expansion, companies like Julun Intelligent and Aidi Precision have stated they will continue to expand their production capacity; Huazhong CNC will raise funds through a private placement for the construction of its industrial base.
Machine Vision Remains Hot
The machine vision field continues the hot trend of the previous two years.
From a financing perspective, while the number of financing events in the domestic robotics industry has contracted year-on-year, machine vision remains one of the most popular areas for financing. Companies related to machine vision, including Mech-Mind, Yishi Technology, Boshi Pixel, Tuyo Technology, Zhixiang Optoelectronics, Yinniu Microelectronics, WanCe Technology, XinJian Intelligent Control, Chixiao Technology, Haitu Microelectronics, Xiaosong Technology, Lingming Photonics, and Shishi Technology, have completed financing rounds.
From a product and solution perspective, with the continuous expansion of application areas, user demands for 3D vision have also changed. To address this, manufacturers such as Hikvision, Tuyo Technology, Xingyuan Zhe, Ruben Technology, and Weigan Technology are focusing on improving product performance thresholds and the rationality and practicality of their solutions while deeply exploring various application scenarios.
From the perspective of collaboration with robot manufacturers, domestic and international robot manufacturers such as ABB, FANUC, KUKA, Syntec, Denso, Kawasaki Robotics, Daming, JAKA Robotics, Aobo, and Elite Robotics have deeply integrated AI + 3D vision technology.
For machine vision companies, there is still significant room for growth. According to GGII's forecast, my country's machine vision market will exceed 56 billion yuan by 2027, with the 2D vision market exceeding 40 billion yuan and the 3D vision market approaching 16 billion yuan.
With this multi-billion yuan market opportunity at hand, machine vision companies need to establish competitive barriers in process algorithms to have a chance to compete with other players in the initial positioning phase.
Downstream Applications Show Increased Differentiation
This year, the downstream applications of industrial robots have shown increased differentiation. The photovoltaic industry continues its high growth trend, while the lithium battery and energy storage industries have seen slower growth. The automotive industry shows signs of recovery, while the 3C electronics industry remains weak. The metal products, food, and pharmaceutical industries all show a downward trend. New energy vehicles and the photovoltaic industry have become the main drivers of growth in the industrial robot industry this year.
Specifically, in the new energy vehicle sector, data from the China Association of Automobile Manufacturers shows that from January to October 2023, China's production and sales of new energy vehicles reached 7.352 million and 7.28 million units respectively, representing year-on-year increases of 33.9% and 37.8%, with a market share of 30.4%. Exports of new energy vehicles reached 995,000 units, a year-on-year increase of 99.1%.
The positive performance of new energy vehicle production and sales will, to some extent, drive huge demand for industrial robots. From an application perspective, the transformation from traditional automobile production lines to new energy vehicle production lines will create new sub-sectors for the robotics industry.
In the photovoltaic sector, photovoltaic companies have launched a new round of large-scale capacity expansion this year.
Data from the China Photovoltaic Industry Association shows that in the first three quarters, the output of polysilicon, silicon wafers, cells, and modules in the four major photovoltaic sectors all increased by more than 60% year-on-year. It is estimated that China's new photovoltaic installations will reach 120GW-140GW in 2023. Benefiting from the high prosperity of the photovoltaic industry, the demand for photovoltaic automation equipment continues to rise, and the photovoltaic industry may become a major driving force for the robotics industry in 2023.
It is certain that demand in the photovoltaic industry is continuously increasing, which may present a new opportunity for robotics companies to seek new growth.
The Three-Step Approach to Going Global
If in the past, robotics companies' overseas expansion was a search for a few breathing spaces outside the fiercely competitive domestic market, now it has become a standard practice for business development.
In 2023, the enthusiasm of robotics companies for going global remained undiminished. Besides participating in regular international exhibitions, they frequently established overseas subsidiaries or offices; for example, Topstar established a branch in Bac Ninh, Vietnam.
In terms of overseas expansion routes, one is targeting developed countries such as the United States, Europe, Japan, and South Korea. These regions suffer from severe aging populations, high labor costs, and particularly severe labor shortages across various industries, making the trend of "machine replacing human labor" inevitable. Companies such as Estun, Eft, Topstar, Inovance Technology, Siasun, Siasun Robot & Automation, Canopy Robotics, Hikrobot, Aobo Intelligent, Yuejiang Technology, Han's Robotics, Rocco Robotics, Bokent, Yifei Technology, and Boqing Technology have already begun their strategic deployments.
Secondly, they target rapidly developing manufacturing markets such as Latin America, Southeast Asia, and North America. While these regions have abundant and low-cost labor, the overall skill level of their workforce is relatively low, failing to meet the labor demands of industrial relocation. Companies like Topstar, Risson Technology, and Elite Robotics have identified these regions as crucial battlegrounds for their overseas expansion.
Thirdly, they target the Middle East, a region with potential demand for industrial robots. The Middle East has a concentrated demand for industrial robots in manufacturing, logistics and warehousing, and sanitation sectors, particularly in petrochemicals, automotive manufacturing, and metal processing. The trend towards increasing production efficiency and replacing labor costs signifies a growing demand for industrial robots. Companies like Huichuan Technology, Huarui Technology, Geek+, Elite Robotics, and Canopy have already identified the Middle East as one of their key sales expansion areas.
While these different approaches reflect the fact that where labor is cheap, the opportunity for industrial robots is diminished; conversely, where labor is expensive, there is opportunity for industrial robots.
On the other hand, companies venturing overseas this year have also frequently reported good news.
For example, GME, a subsidiary of Eft, secured a procurement order from Volkswagen Group Mexico for the integration of the Jetta A7 platform into the H102 solution of the Tayron project at the Puebla plant, with a total project value estimated at approximately RMB 223 million.
Changzhou Huashu Jinming, a subsidiary of Huazhong CNC, signed an "Equipment Supply and Technical Service Contract" with a client and related parties. Changzhou Huashu Jinming plans to sell a soft-pack battery module assembly line to an overseas client, with a contract value of RMB 417 million.
This also indicates that through an overseas expansion strategy, companies can gain more business opportunities and profit sources, improve their profitability, and achieve sustainable development.
Acquiring Stronger Capabilities
This year has seen numerous acquisitions in the capital market. For companies, acquisitions are an important means to enhance overall competitiveness and rapidly expand their scale and market share.
On the one hand, acquirers attempt to leverage the advantages of their target companies to quickly open up markets with minimal time and cost. For example, Guomao Co., Ltd. plans to acquire a 65% stake in Modoli Intelligent Transmission (Jiangsu) Co., Ltd. for cash, leveraging its production capacity and distribution channels to quickly enter the precision planetary gearbox field.
On the other hand, this year, companies such as Huichuan Technology, Siling Robotics, Sanfeng Intelligent, Jinggong Technology, and Haide Control have used acquisitions to optimize resource allocation, accelerate the synergistic development of core industries, and achieve economies of scale.
From a positive perspective, mergers and acquisitions can help companies integrate resources such as technology, brands, channels, and customer resources. The complementarity of resources can promote innovation, leading to the development of new products, technologies, and businesses, thereby improving the production and operational efficiency of the acquired companies and enhancing their competitiveness.
However, it is also important to be aware that benefits and risks coexist. The integration of the acquired companies is a complex and long-term process, requiring joint efforts and cooperation from both parties to ensure the company's development and competitiveness.
IPO Tightening
In 2023, under the major trend of intelligent manufacturing, companies in the robotics industry chain are seizing the opportunity to access broader capital markets.
According to incomplete statistics from GGII (Gaogong Robotics), as of December 27th this year, there are 23 listed companies in the robotics industry chain. In terms of listing venues, the Science and Technology Innovation Board (STAR Market) remains the preferred choice for robotics industry chain companies, with companies like Shuangyuan Technology, Yifei Laser, and Yuntian Lifeng all listing on the STAR Market. The second most popular is the ChiNext (Growth Enterprise Market), with companies like Feiwo Technology, Rongqi Technology, and Googol Technology listed there.
In addition, the Beijing Stock Exchange (BSE) has become another preferred choice for SMEs seeking listing, with companies like Juneng Shares, Lierda, and Sunny Precision choosing to list there this year.
Compared to the STAR Market, ChiNext, and BSE, listing on the main board has more requirements and higher thresholds, resulting in fewer successful listings this year. GGII's research found only Huawi Technology and Xiaxia Precision.
Just when everyone was enthusiastic about IPOs, the policy "CSRC Coordinates the Balance of Primary and Secondary Markets and Optimizes IPO and Refinancing Regulatory Arrangements" was undoubtedly a blow to some robotics companies currently undergoing pre-listing guidance or in the process of listing.
By tightening IPO reviews, truly high-quality companies are selected at the review stage, allowing genuinely valuable companies to receive more support from the capital market. At the same time, it also allows some companies to re-examine their investment logic and strategic direction in order to find investment methods that are truly suitable for the company itself.
Giants Enter the Fray
Robotics, as a representative of the hard technology sector, has frequently attracted attention from cross-industry players this year.
Internet giants continue to invest. At the beginning of the year, Tencent Robotics X Lab launched its self-developed robot dexterous hand and robotic arm, showcasing for the first time the robot's precise perception capabilities in natural environments and its ability to control fine movements; Alibaba released a demonstration video showing how it uses natural language to command industrial robots after integrating a large-scale model; Huawei invested 870 million yuan to establish Jimu Robotics, sparking considerable discussion in the industry regarding its potential entry into the robotics field.
Major terminal manufacturers are also getting involved. Automotive parts company Keboda established a subsidiary, Foxconn established Foxconn New Business Development Group Co., Ltd. in Zhengzhou, and Luxshare Precision established Lixin Precision Intelligent Manufacturing (Shantou) Co., Ltd. The business scope of these companies all includes industrial robot manufacturing and intelligent robot R&D.
With the support and guidance of national policies, robots have become a key component of intelligent manufacturing. For these influential cross-industry companies, investing firmly in hard-tech industries that benefit long-term social development is a viable way to improve their own development and open up new growth curves.
Source: GGII Robotics
.jpeg)
