In early February, the official WeChat account of the Ministry of Industry and Information Technology (MIIT) of China announced that from January to December 2020, China produced 237,068 industrial robots, up 19.1% year-on-year, which is the highest growth rate of China’s industrial robots in the past three years. In addition, data from the National Bureau of Statistics of China show that the cumulative growth of China’s industrial robot production was -6.1% from January to December 2019, compared with 4.6% from January to December 2018.
The year 2020, in which industrial robot production has made significant development, also marks the eighth year that China has secured its position as the world’s largest market for industrial robot applications. China is a major manufacturing country, and industrial robots are key support equipment for advanced manufacturing, and China naturally has a high demand for industrial robots, as documents from the National Development and Reform Commission pointed out that China has been the world’s top market for industrial robot applications since 2013.
However, the density of industrial robots in China still needs to be improved. Data from the 2020 World Robotics Report released by the International Federation of Robotics (IFR) show that China’s manufacturing industry ranked 15th in the world in terms of robot density in 2019, with 187 robots per 10,000 workers (a density of 187), far below top-ranked Singapore, but already above the world average: Singapore’s robot density is 918, while the world average density Singapore’s robot density is 918, while the world average is 113.
Industrial robots have the reputation of “the jewel in the crown of the manufacturing industry”. The world’s first industrial robot was born in 1959, but China’s research and development of robots was relatively late, starting in the 1970s. In 1982, Jiang Xinsong, then director of the Shenyang Institute of Automation of the Chinese Academy of Sciences, led a scientific research team to develop China’s first industrial robot. Jiang Xinsong was one of the first academicians of the Chinese Academy of Engineering and was known as the “father of Chinese robots.”
After more than half a century of development, how has China’s industrial robotics industry developed so far? What are the shortcomings or bottlenecks, and how should they be broken out?
Application and Manufacturing of Industrial Robots in China
The application of industrial robots in China has been rapidly improved in the past few years, although in 2019, there is still a big gap between the density of industrial robots in China compared to Singapore, but in 2014, the density of industrial robots in China was only 36, which is lower than the world average density.
China’s purchases of industrial robots (or installed base), on the other hand, are quite large. IFR’s report shows that global industrial robot sales in 2019 were 373,000 units, of which 140,500 were sold to China, accounting for about 37.6% of global sales. China’s purchases not only ranked first in the world, but were also higher than those of Japan, which ranked second (49,900 units), the United States, which ranked third (33,300 units), Korea (27,900 units), and Germany (20,500 units), which ranked fifth, combined.
In China, the automotive, 3C, home appliance, and metal processing industries are the first to apply industrial robots, with the number of industrial robots used in the automotive and 3C sectors accounting for half of China’s industrial robot applications.
So, how many of the industrial robots purchased in China are “made in China”? How competitive is the market for “made in China” industrial robots?
The prospectus (registration draft) of Siasun (300024.SZ), a listed company controlled by the Shenyang Institute of Automation of the Chinese Academy of Sciences, released in mid-January 2021 to issue shares to specific targets and list on the GEM, provides some observations: in the first half of 2019, the market share of domestic independent brands in China’s industrial robotics market was 36%, that of Switzerland’s ABB was 13%, and that of Japan’s Yaskawa’s market share was 12%, Japan’s Fanuc’s market share was 16%, Germany’s Kuka’s market share was 13%, and the remaining 10% were other brands. Yaskawa and Fanuc of Japan, KUKA of Germany and ABB of Switzerland, known as the four families of industrial robots in the industry, are the world’s leading industrial robot manufacturers.
Siasun, a listed Chinese company founded in 2000 and has laid out more than 100 products in five series: industrial robots, collaborative robots, mobile robots, special robots and service robots, with products exported to more than 40 countries and regions in total.
Siasun said that China’s robot manufacturing has now achieved the leap from following to running stage, a relatively large competitive disadvantage is the relatively short development history of enterprises, the industry market application experience is not as rich as foreign enterprises, still need to dig deeper into the niche areas and accumulate experience. “The difficulty in expanding foreign customers is that foreign companies do not have high brand awareness of Chinese companies, and need a lot of industry performance as support. In addition, for the company, there is a shortage of international talents, and it takes some time to really understand the needs of customers. The problems encountered in the country in recent years are mainly focused on the fierce competition in the market, with high-end barriers above and domestic chasers below, leading to disorderly competition in the market.” Siasun said. “Brand” and “service” are also two keywords mentioned by Dai Jiapeng when he talked about the competitiveness of China’s industrial robots. Dr. Dai graduated from the Massachusetts Institute of Technology, designed automation equipment in the manufacturing development department of General Motors, joined Foxconn in 2004 and led the group’s automation robotics team until his retirement, and won the Joseph F-Engelberger Robotics Award in 2016.
In Dai Jiapeng’s opinion, to evaluate the competitiveness of Chinese-made industrial robots, we cannot make a generalization, but should divide them into industrial fields and application scenarios, “If it is a traditional application field like automobiles, the competitiveness of Chinese-made industrial robots is not enough, and the brand and service reliability need time to accumulate, but in fields such as handling, which require less precision and sensitivity, Chinese-made industrial robots are very competitive.” “The advantage of China’s industrial robots is the high-cost performance, and the weak point is mainly in the accuracy, stability and service life. The main application areas of Chinese industrial robots at present are handling and loading and unloading, and foreign industrial robots with 6 axes or more are commonly used in high-end automotive manufacturing, 3C and other fields.” said Dr. Li Wenwei of South China Robotics Innovation Research Institute.
Dai Jiapeng believes that price is certainly an important indicator to measure competitiveness, and there is a characteristic of Made in China that price spoilers can easily appear, “Price spoilers are not necessarily bad, it may promote the development of the industry, but its appearance is a pressure for domestic and foreign manufacturers.”
Technology content, control of high-precision components, is currently a challenge for Chinese industrial robots. The production chain of industrial robots can be roughly divided into upstream, midstream and downstream. Upstream is the manufacture of components, especially the manufacture of core parts such as reducers, controllers and servo motors; midstream is the manufacture of the robot body, and downstream is the system integration, which is based on the robot body, combined with the developed intelligent software to arrange the production line and make the industrial robot really put into use.
Estun (002747.SZ), another leading Chinese industrial robot company, introduced in its 2021 non-public offering of A-share stock proposal released in mid-January that the three core components of reducers, servo systems and controllers are the core technical barriers of industrial robots, accounting for about 36%, 24% and 12% of the cost composition of industrial robots respectively, with a combined share of over 70%.
Siasun said that in the whole industrial chain of industrial robots, the gross profit rate of the whole machine manufacturing is the lowest, the controller is the brain of industrial robots, which determines the superiority and inferiority of industrial robots, with high technical content and the highest gross profit rate, the next highest gross profit rate is the servo system, the servo system includes servo motor and servo driver, the reducer is also very important, but the gross profit rate of the domestic reducers is very low.
Estun introduced in the above-mentioned non-public stock issuance plan, at present, about 85% of the domestic reducer market, 70% of the servo system market and more than 80% of the controller market are occupied by foreign brands. The domestic core components and the performance of foreign brands There are certain differences in indicators. If the key technologies of high-precision reducers, high-sensitivity servo systems and high-performance controllers cannot be broken, not only the profit level of domestic industrial robot products could be eroded, but the performance and reliability of Chinese robots cannot be fundamentally improved.
As early as the opening year of the 13th Five-Year Plan, the National Development and Reform Commission of China released the robot industry development plan (2016-2020), which pointed out that a large gap between China’s industrial robot industry and industrially developed countries is the absence of key links in the robot industry chain, the dependence on imports of high-precision reducers, servo motors and controllers in parts and components, and the lack of industrial competitiveness of related enterprises, which are “small, scattered and weak”.
At present, it seems that the above two gaps have not yet been effectively improved. Data from the Ministry of Industry and Information Technology of China show that in 2020, the national industrial robot manufacturing enterprises above the size of the business income of 53.17 billion yuan. The market value of Siasun, a more famous domestic industrial robot listed company, is 18.6 billion yuan, and that of Estun is 26.1 billion yuan.
Make up for the shortcomings and breakthrough
Looking back on history, Dai Jiapeng believes that a key factor in the rise of internationally renowned robot manufacturers, including the four major families of industrial robots, is that they have worked closely with automakers for many years, starting from meeting the needs of spot welding, spraying and handling needed for auto manufacturing, finding application scenarios and developing new products based on what customers need. “I think the reference to the integration of two technologies is particularly well put.” Dai Jiapeng said. The so-called “two zations” refers to informationization and industrialization, and the integration of the two is to make informationization and industrialization highly integrated, to drive industrialization with informationization, and to promote informationization with industrialization. Dai Jiapeng believes that many people are aware of the importance of technology, information technology emphasizes technology, but technology alone is not enough, technology has to be useful, and only the technology hatched from it will have the most vitality.
It is also the experience of some industrial robotics practitioners to find a place for technology to be used and to force the progress of technology from application scenarios. When asked about the acceptance of the institute’s technical achievements by enterprises, President Cao Yongjun said that what customers look for is not the patents obtained by the institute, but whether they can solve the practical problems on the production line.
Siasun introduced that the company’s industrial robots made a breakthrough in the welding of the Hong Kong-Zhuhai-Macau Bridge, and in 2020 the company pushed a new series of fire-arc welding robots for welding, with obvious market demand. “It fully confirms the need to get a breakthrough after refining in the segmented focus areas, and it can be said that in recent years many Chinese industrial robots are continuously expanding the market application fields in this way,” Siasun said.
For the subsequent development, Siasun company believes that it must break through the local substitution of core components. Core components are still the bottleneck that restricts the development of domestic robots, and if they are not mastered in their own hands, Chinese brands will be very passive as the industry competition intensifies and foreign brands lower their prices.
In addition, Siasun pointed out that there is not only a high-end talent gap in the industry, but also a problem with the talent training structure, which emphasizes R&D over application.
“In the field of core parts and native manufacturing, there is a lack of R&D technicians who master the core technology and assembly personnel with rich experience accumulation; in the field of system integration, there is a lack of professional talents with interdisciplinary capabilities, and the training of application-oriented talents such as on-site commissioning, maintenance operation and operation management is still lacking. The previous training mechanism of simply relying on counterpart professional schools to deliver professional talents has been difficult to meet the future demand for industry talents, requiring the government, enterprises, educational institutions, and third-party industry organizations to jointly promote the training and development of talents in China’s industrial robotics industry.” Siasun says.
Dai Jiapeng, on the other hand, emphasizes the construction of basic capabilities. He believes that it also needs to be strengthened in terms of software, which, includes underlying control software, overall robot control software, design and analysis software, industrial communication software, and simulation software. In terms of the industry chain to make up for the shortcomings, Dai Jiapeng suggests that, in addition to strengthening collaboration between robot manufacturers and the application industry, it is also important to focus on the power of second-tier suppliers (i.e., suppliers of suppliers).
Since its birth, industrial robots have gone through three generations of development, from the first generation of demonstration and teaching reproduction, which can only repeat the specified action in the pre-installed program, to the second generation of offline computational programming, which significantly improves adaptability, and then to the third generation of intelligence, with enhanced perception, autonomous decision-making and anti-interference capabilities, gradually penetrating manufacturing scenarios. “Do not underestimate the gears, bearings, sensors, optical sensing, pneumatics and other components companies.” According to Dai Jiapeng, the products of these parts enterprises can be supplied not only to industrial robots, but also to other automation equipment, and their development prosperity should be ahead of robot whole machine manufacturing.
Source: Economic Observer