Latest posts by Jan Zhang (see all)
- COVID-19 Will Force Manufacturers to Improve Resilience Via Increased Automation & Digitalization - March 13, 2020
- Coronavirus Gives Chinese Manufacturing Market a Chill - February 12, 2020
- The Industrial Robot Market – 2019 - January 27, 2020
- Industrial Robots – Slowing But Still Growing – With Significant Changes in the Market to Come - December 16, 2019
- By 2022, the industrial robot market will be worth over $15bn globally.
- China’s share of the global industrial robot market will increase from 30% currently, to over 40% by 2022.
- Rapid growth in certain sectors in China is leading to a shift in the market structure for industrial robots globally.
According to our latest research, 2017 was a record year for the global industrial robot market. Following a notable uptick in growth, which started during the second half of 2016, the market increased by 20% in revenue terms and 31% in unit terms in 2017. By 2022, we forecast the global market will reach over $15bn.
Importantly, it’s worth noting that the global growth rate has been influenced most significantly by China, which accounted for almost 30% of the global industrial robot revenues in 2017 – the region also contributed almost 50% of the total value of revenue growth. Comparatively, revenues across the rest of the world grew by around 13% in 2017, whilst revenues for China grew by nearly 40% over 2016 figures; and unit shipments grew by roughly 60%. Many industrial robot suppliers experienced >50% unit growth for their business in China during this period.
Although the market growth rate for China is forecast to slow for 2018, it is still expected to see double digit growth. Furthermore, it will remain the fastest growing regional market globally, and consequently we predict its revenue share will increase to over 40% by 2022.
Where does China’s stronger growth come from, and how is that impacting the global industrial robot market structure?
Rising labor cost, a lack of skilled labor, the desire to improve efficiency and enhance product quality, and manufacturing’s transition from mass production to low-volume & high-product mix (with shorter and faster product cycles) have always been the main drivers for growth in the industrial robot market globally; and the same drivers hold true in China. However, things that differentiate China from other regions globally are its substantial manufacturing scale and the concentrated outbreak of all these issues mentioned above at a single point in time!
The electric and electronics industry, especially the 3C industry (Computer, Communication and Consumer Electronics), which has experienced explosive demand for industrial robots more recently, offers a quite typical example of the “perfect storm” of factors that have combined to stimulate Chinese industrial robot demand.
- Labor Intensive Industry. Low labor costs and a large number of young workers used to be the advantage of manufacturing in China, which contributed to the rapid growth of the 3C industry over the past decade. But with its “demographic dividend” nearing an end, China faces a more serious labor problem than other regions of the world. These problems are stimulating demand for industrial robots, thereby reducing pressure on both labor requirement and cost.
- Shorter Life Cycle and Higher– Product Mix. The 3C industry (and especially consumer electronics) is one of the fastest growing and most frequently changing industries, with increasing demand for enhanced flexibility and speed at manufacturing facilities. Using the release history of the iPhone an example, it’s possible to illustrate the vast increase in model variants due to different sized storage capacity, processors and colors. A desire for manufacturing flexibility can be more easily met with increased use of robotics.
|Model||iPhone||iPhone 4||iPhone 5||iPhone 6||iPhone 7/8/X|
|Number of model variants||2||14||27||56||60|
|Total Volumes Sold in the following years (units)||12m||125m||231m||211m||217m|
- Fairly Standard Production Line, and Robots Can Be Used in Large-Scale. There is also a growing number of system integrators that provide system solutions for the 3C industry. Their solutions are becoming more mature and standardized and consequently easier to install, which is encouraging new users to adopt robotics.
- Demand for Higher Product Quality. This trend has been particularly strong in China and has ramped more recently as government initiatives (such as “Made in China 2025”) aim to move industries “up-a-level”, empowering them to compete at the mid- to high-end of the global value chain (as opposed to the low-end). Industrial robots can facilitate improvements here too.
Before the emergence of the electric and electronics industry as a fast-growing consumer of industrial robots, the market structure was most heavily influenced by the automotive industry, which accounted for over half of industrial robot revenues in the past decade. An auto-line project could easily use around 3,000 robots and no other industries would have such high demand for robots in a single project. However, things have started to change now. Using smart phones as an example, Globally, over 80% of smart phones are manufactured in China. Whenever Apple develops a new iPhone model, thousands of industrial robots would be purchased for the new production line. Now in addition to the smart phone manufacturers themselves, many tier 1 suppliers are also starting to use industrial robots more too. In 2017, 27% of industrial robots sold were shipped to this sector. And in 2022, this share is forecast to increase to 34%, making it the biggest industry segment for industrial robots in unit terms.
Apart from the surge in units, the electric and electronics industry also bring in much changes to the product mix of the market because applications used in this industry is very different from that in automotive.
|Automotive||Electric and Electronics|
|Robot Type||Articulated robots account for the majority of robots sold.||Almost all types of robots can be adopted in some form or fashion in this industry, but SCARA robots are the most widely used robot type.|
|Payload||Mainly medium and heavy payload robots.||Mainly low and medium payload robots, the majority would be under 10kg.|
|Application||Spot welding represents the largest share, followed by arc welding, painting, and handling. Human-oriented collaborative assembly has more potential to grow.||A variety of applications, with assembly taking the largest share. Other applications include loading/unloading, handing, spraying gluing, soldering and sorting.|
Based on the table above, the structural changes that already taking place in the industrial robot market include: an increase in share for SCARA robots, an increase in share of smaller payload robots, and an increase in share of robots for assembly applications.
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