Analysis on the distribution and development trend of China's robot industry

With the transformation and upgrading of the economic structure and the advancement of hard-core research, the endless species in China are becoming more and more brilliant, and technologies such as construction robots and contactless medical robots are deeply unlocking the unmanned era. Especially in the context of the continued spread of the new crown pneumonia epidemic, robots suitable for different scenarios have become a rigid demand for industrial development.

At present, China has become the world's largest robot market (table). According to the classification of the Chinese Society, robots can be divided into industrial robots, service robots, and special robots. Data shows that in 2021, the scale of China's robot market will reach 84 billion yuan, of which robots will account for 44.6 billion yuan, accounting for 53%; service robots will account for 30.3 billion yuan, accounting for 36%; and special robots will account for 9.1 billion yuan, accounting for 11%.

Robots are known as the "crown jewel of the manufacturing industry" and are also an important indicator of a country's technological innovation and high-end manufacturing level. Advanced manufacturing represented by robots is becoming a new driving force for China's economic growth. How is my country's robot industry distributed?

01

Geographical distribution: The “key cities” are in the Pearl River Delta, with Shenzhen leading the pack

As the world's second largest economy, China's economic growth and transformation and upgrading have attracted the entry of major global robot manufacturers, including FANUC and ABB, which are competing to establish production bases in China. Data from Debon Securities shows that since 2013, China has become the world's largest industrial robot application market. From 2013 to 2018, the compound annual growth rate of China's industrial robot sales reached 33%. By 2020, China will firmly sit on the position of the world's largest robot consumer country.

With the advancement of hard-core technology independent innovation and domestic substitution strategy, China's local robot companies have risen rapidly, and a number of domestic brands have been born, such as Estun (002747), Inovance (300124), Efort (688165), Canopus, and Bozhilin. According to MIR statistics, in 2020, the localization rate of China's industrial robots reached 29%.

As an important carrier for the application of artificial intelligence in diversified industries, the field of robotics has attracted a lot of capital in recent years. According to Qichacha data, the number of robotics-related companies has increased significantly in the past five years. In 2015, there were 13,632 robotics-related companies, which exceeded 20,000 in 2016 and increased to 43,352 in 2019. As of now, there are 212,600 robotics-related companies in operation and in existence nationwide.

From a geographical perspective, robot companies are mainly concentrated in five major regions: Guangdong, Jiangsu, Zhejiang, Shandong, and Shanghai. Guangdong has the largest number of operating and existing robot-related companies, reaching 55,000, accounting for 25.87% of the country; Jiangsu ranks second, with 28,800 robot-related companies, accounting for 13.55% of the country; Zhejiang, Shandong, and Shanghai have more than 10,000 robot-related companies, 17,200, 16,600, and 11,700 respectively. Guangdong accounts for 1/4 of the country's robot companies, and can be called a "key town" for Chinese robot companies.

Data from the China Business Research Institute shows that there are 12 cities in Guangdong with robot industries. Among them, Shenzhen has the largest total added value of the intelligent robot industry, reaching 6.15 billion yuan, accounting for 80.7% of the province's intelligent robot industry. Other cities with a relatively large share include Dongguan (8%), Huizhou (4.1%), and Foshan (2.9%). The province's intelligent robot industry is mainly concentrated in the Pearl River Delta, especially Shenzhen, which is far ahead.

In recent years, Foshan has made rapid progress in the field of robotics industry and achieved outstanding results. In 2017, Midea Group (000333), the "big boss of home appliances", made a bid of 29.2 billion yuan to acquire German robotics giant KUKA. This cross-border acquisition caused a sensation. KUKA, together with ABB, FANUC and Yaskawa, is known as one of the "four major families" of industrial robot manufacturing in the world and has a monopoly in some core component technologies.

In March 2018, Midea Group announced Kuka's development plan for the first time. The former intends to inject capital into Kuka's Chinese subsidiary business and jointly establish three joint ventures to expand business in the three major areas of industrial robots, medical care, and warehouse automation.

In July of the same year, another corporate giant, Country Garden (02007.HK), also located in Foshan, announced the establishment of a wholly-owned subsidiary, Guangdong Boshilin Robotics Co., Ltd. ("Boshilin"), to focus on the research, development, production and application of construction robots. It plans to independently develop construction robots for large-scale and systematic application in most aspects of construction, "allowing robots to work as intelligently as humans."

In the past three years, Boshilin has achieved the development of construction robots from independent research and development, small-batch production to engineering testing, engineering services and mass commercialization, and has carried out comprehensive end-to-end planning and practice, building a complete full-cycle closed loop. Boshilin is the world's first company to try to use robots for large-scale and systematic construction, and is committed to becoming a global leading provider of intelligent construction solutions.

It is understood that due to the harsh working environment, large differences in scenes, and complex and changeable construction surfaces, the requirements for core components and cores of construction robots are very different from those of industrial robots and other products. For the eight core systems of construction robots, including servo, navigation, vision, and software, Bozhilin has invested a lot of manpower and material resources to achieve full coverage of independent research and development. Among them, the motion control algorithm based on fuzzy adaptive, intelligent visual sensors, robot cluster operation planning and scheduling system, and construction robot operation system have filled the gap in the field of construction robots in the world.

As of the end of November 2021, BOE Technology has submitted 3,461 valid patent applications and obtained 1,640 authorizations; related R&D products have successively won numerous awards including the China Patent Award, IF Design Award, Red Dot Award, IDEA Award, Red Star Award, and Golden Reed Award.

Entering the field of robotics is undoubtedly a key choice for the transformation and upgrading of traditional industries. Midea Group and Country Garden have successively entered the robotics industry. One achieved a curve overtaking through mergers and acquisitions, while the other completed the leap from "0 to 1" through independent research and development. The methods are very different but the results are the same. It is undoubtedly a classic epitome of the transformation and upgrading of China's traditional industries.

As can be seen from the previous article, the distribution of robot companies is highly consistent with the current level of economic development. Under the trend of "the strong will always be strong", this may mean that regions with rapid economic growth such as the Pearl River Delta and the Yangtze River Delta are expected to be far ahead in the field of robots.

02

Industry distribution: Automobile and electronics are the most widely used, and real estate has great potential

As mentioned above, more than 43.15% of the global robot market is industrial robots, and 37.2% is service robots. These two types of robots account for more than 80% of the robot market. According to a recent report released by the International Federation of Robotics (IFR), as of now, the number of industrial robots operating in factories around the world has exceeded 2.7 million, setting a record high. China is the world's largest and fastest-growing robot market, with a development speed that is unprecedented in the history of robots.

Data from Qichacha shows that in terms of industry distribution, the country's operating/existing robot-related companies are mainly concentrated in the wholesale and retail industry, accounting for 34.7%; followed by scientific research and technical services, with the number of companies accounting for 23.0%; manufacturing, information transmission, software and information technology services accounted for more than 10%, at 15.1% and 13.7% respectively; the number of robot-related companies in education and construction is relatively small, accounting for 2.2% and 1.6% respectively.

Research by Debon Securities shows that, from a global and domestic perspective, automobiles and electronics are currently the two industries with the largest application of robots, the largest number of participants, and relatively mature related technologies.

As early as 2010, the market was dominated by automotive applications. With the rapid development of the fields of, new downstream application scenarios of robots continue to expand. In the field of industrial robots, in 2020, the four major industries of automotive parts, metal products, automobiles, and household appliances accounted for 41%, of which more than 90% were vertical multi-joint robots; electronics, lithium batteries, and photovoltaics accounted for 38%, of which 70% were SCARA robots and the other 30% were vertical multi-joint robots. There are certain similarities in the demands in the manufacturing process of these industries.