China’s State Council cited the Ministry of Industry and Information Technology, saying that “China has been the world’s largest market for industrial robots for eight consecutive years. In 2020, the manufacturing robot density, a metric used to measure a country’s level of automation, reached 246 units per 10,000 people in China, nearly twice the global average.”
In the world’s industrial robot industry, ABB of Switzerland, KUKA of Germany, Fanuc of Japan, and Yaskawa Electric are the most famous. They are called the “four major families” of industrial robots.
However, China has little pricing power because its key technologies are in the hands of other countries.
According to Baidu’s article, the control system, reducer, and servo system are the three upstream core components in the industrial robot industry chain. The report stated that the cost of these three core components accounted for about 70% of the total cost of industrial robots.
Among them, the localization rate of precision reducers necessary for industrial robots is less than 30%, and 85% of the reducers are controlled by foreign capital, especially Japanese companies. For example, Japan’s Nabtesco and Harmonic account for about 75% of the global robotic reducer market.
Manufacturing precision reducers requires a significant investment and has great technical difficulties and extremely high technical barriers. Therefore, in industrial robots, China has almost no pricing power.
In addition, the market share of about 70% of servo motors and more than 80% of controllers in the domestic industrial robot market is also in the hands of the “four major families.” Like Tesla, if Chinese companies want better services, they have to buy other people’s “package” services and pay more.
In a commentary in February, China’s financial media self-media Huashang Taolue said that the biggest reason why Chinese robots are inferior to those of other countries is the “algorithmic gap” in the core control system.
As the “brain” of an industrial robot, the core controller affects machine stability and accuracy. The system composed of algorithms is equivalent to language, which transmits the ideas of the “brain.” Chinese companies can buy software from the “four major families,” but their core algorithms are never leaked.
Because the core algorithm is not mastered, the key indicators such as stability, failure rate, and ease of use of domestic industrial robots have significant deficiencies. The robots cannot accurately complete some complex actions.
The domestic “brain” has obvious disadvantages compared with the equipment of the “four major families.” The article cited Zhou Chao, technical partner of Shenyang Thunderbolt Technology, saying that more than a hundred sets of equipment from the “four families” in the factory may break down just a few times a year. But, if we use domestic robots, the failure rate may be several times that of others.
Data showed that in China’s industrial robot market in 2020, foreign robot manufacturers still occupied 47% of the share, of which the “four major families” occupy 28% of the market. The remaining is divided among Epson, Mitsubishi, Yamaha, and others.