Big news! Yaskawa Electric announces big move, targeting the Chinese industrial robot market

Recently, Yaskawa Electric, one of the "four major families" of industrial robots , announced that it will build a new factory in Japan to produce core components to improve the energy-saving performance of home appliances. It plans to double its domestic production in Japan to reduce the proportion of components produced in China. This move is to avoid the risk of interruption in purchasing parts from China against the backdrop of intensified Sino-US confrontation.

It is understood that in order to purchase parts from China, Japan's Daikin Industries plans to build a supply chain within 2023 that will allow it to produce air conditioners without Chinese-made parts even in the event of war. It can be seen that the trend of Japanese companies restructuring their supply chains and moving towards getting rid of their dependence on China is expanding.

It is worth noting that after 2024, Yaskawa Electric will also increase the proportion of self-production of industrial robot parts from the current 40% to 70%, obviously to ensure the timely supply of parts.

On October 7, Yaskawa Electric released its consolidated financial report (International Accounting Standards) for March to August 2022. During the reporting period, the company achieved revenue of 263.5 billion yen, a year-on-year increase of 9.8%; net profit attributable to shareholders was 23.7 billion yen, a year-on-year increase of 12%.

Yaskawa Electric said that the increase in raw material and logistics costs during the reporting period became a burden. In order to make up for the shortage of components such as semiconductors, the company purchased parts circulating in the market at higher prices.

From June to August, Yaskawa Electric's orders increased by 21% year-on-year to 166.3 billion yen, showing a good performance outlook. Among them, orders from the Americas increased by 48%, China increased by 12%, and Europe decreased by 15%. The order amount still exceeded the quarterly operating income, indicating that the backlog of orders is increasing, but the difference fell to 23.1 billion yen, less than 47.3 billion yen in March-May.

From a regional perspective, Yaskawa Electric's business is mainly in Japan, America, Europe, China and other Asian countries. Except for the Chinese market, revenue has increased during the period, with the Americas growing the fastest at 34.8%. Revenue in the Chinese market fell by 1.7%, mainly due to the previous epidemic blockade.

At the earnings conference, Yaskawa Electric Chairman and CEO Hiroshi Ogasawara said regarding the Chinese economy, "Exports are decreasing and, overall, are no longer as strong as before." Regarding the slowdown in the global economy, he said, "It has not affected our business at present." Regarding the outlook, he said, "There will not be a rapid cooling of investment," but in China, shipments will be partially delayed based on the cash flow of customers.

Among Yaskawa Electric's main businesses, the robotics business grew the strongest, with revenue of 103.6 billion yen during the reporting period, a year-on-year increase of 19.9%, and operating profit of 10.9 billion yen, a year-on-year increase of 56.6%.

The financial report shows that the market growth of Yaskawa Electric's robot business mainly includes three aspects:

First, in the automotive market, the global application of electric vehicles has accelerated, allowing capital investment in lithium-ion batteries to continue to expand and corresponding sales of industrial robots to increase.

Second, the growing demand in the semiconductor and electronic components markets has driven strong growth in semiconductor robot sales.

Third, the general industrial sector, including the food market, has increased investment in the hope of upgrading automated production through the use of collaborative robots and other facilities.

From a regional perspective, China is Yaskawa Electric's largest robot market. Its shipments in the Chinese market in the first half of this year were second only to FANUC. The proportion of its robot business revenue in China also increased from 25% in March-May to 32% today, mainly because the market was released after the epidemic blockade was lifted.

In the full-year forecast for the robotics business, revenue is expected to reach 225.5 billion yen, a year-on-year increase of 26.2%, and operating profit is expected to reach 29.2 billion yen, a year-on-year increase of 69.3%, both higher than previous expectations, indicating optimism for the future.

In order to ensure the full-year performance expectations, Yaskawa Electric stated that it will begin building a new robot machining plant at its headquarters in Kitakyushu to increase internal production and added value. Obviously, this is also to improve the independent production capabilities of local parts and reduce dependence on procurement from overseas markets.