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State of robotics and automation in China

The robotics situation in China has never been more exciting. Over half of all industrial robots sold globally in 2022 went to China. In the first half of 2023, sales grew 17.1% year-over-year to 144,288 units per estimates. China is driving key automation trends originating in electronics and expanding into electric vehicles, batteries, and solar. As a leader in these areas, local companies benefit from automation trends of scale and learning effects.

Credit: Stieler Database

While electric vehicle production capacity peaks passed, 2022's top segment of electronics manufacturing suffers from consumer demand and offshoring. This year's growth stems from solar panel and battery cell production either non-existent or limited in the US and Europe. Observers expect solar capacity to more than double from 380GW in early 2022 to 750-800GW by year's end. Battery facilities near renewable plants also drive sales.

Domestic players increasingly compete in traditionally foreign domains. Multi-axis leader Estun sold over 17,000 robots in China last year, nearing Fanuc and KUKA while surpassing ABB and Yaskawa. In SCARAs, Inovance took share from Epson and Yamaha through rapid adaptation to growth markets.

Strong STEM education provides abundant developer and integrator talent for shorter product cycles and drastically lower costs versus Europe. Foreign firms also increasingly leverage local supply chains, with recent KUKA and FANUC factory expansions in China.

However, robotics hasn't escaped China's economic woes. H1 2023 financing fell 33% year-over-year to $1.3B, mostly drones, machine vision, and medical robots. Fanuc reported unprecedented inventory levels in July and expects normalization no earlier than 2024. Other major vendors reported significant China order declines.

Consolidation looms after the boom since 2007, mirroring construction machinery's trajectory. Dominant local robotics players will likely emerge even stronger, with costs and processes optimized to handle fluctuations.

China remains automation's largest market given strengths in key industries, supply chains, demographics, and government modernization efforts. More efficient AI will also boost applications. Despite geopolitics, European firms still want to leverage China's robotics ecosystem. China's robotics future remains bright.

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