Over the last couple of years we have seen a major shift in industrial robot use worldwide. China, Japan and South Korea are responsible for 40% of all new robot Installation. China has more than 25% of all annual installations. The world market for robots grew 17% last year and has had a fairly steady growth since 2009. There are no indications that this growth will not continue for the next few years.

Shipping of robots worldwide over time [IFR World Robotics 2015]

It used to be that the biggest market for robotics was United States. By 2014 China took over as the single largest market. Over the last two years we have seen 50% annual growth in China in terms of new robot installation. China still has much below average installations of robots. The maturity of a market is typically compared by number of robots installed per 10,000 workers in the manufacturing industry. Mature industries, such as automotive, will typically have 1 robot for every 10 workers. South Korea has the most penetration of robots for manufacturing with 478 robots / 10,000 workers. Japan is #2 with 314 robots / 10,000 workers. Germany is at 292, USA is at 164. The world average is at 87 robots. China is at 36. Even with twice as many robots sold the country would still be below average is terms of use of robots. Even in automotive China is at 1 robot per 30 workers, and there is a lot of opportunity.

Robot sales/shipping in China 2014. [IFR World Robotics 2015]

Why all the automation in China? 

An obvious answer would be that salaries in China have increased by 320% over the last decade. This is clearly challenging the economic feasibility of out sourcing from major industrialized countries such as USA, Germany, Italy, Japan, … No doubt this is a factor. 10 years ago a popular statement was “the world is flat”, i.e., shipping is cheap and as such products can be made anywhere. This is not necessarily true anymore.

However, a more important factor is product quality. In most cases automotive companies did not automate to reduce costs, but to build products that have a homogenous quality. China is slowly realizing that 7 days a week consistent quality is a key factor to international sales. To achieve this they need to have more robots for the plate shop, welding and paint operations. For electronics where tolerances are even more critical this is even more pronounced. Finally, China is trying to build a major aerospace industry where quality is second to none. All this points to continued major growth in robot use in China.

In the past many of the robots have been built outside of the country or through joint ventures by companies such as FANUC, ABB and KUKA. Even today close to 75% of all robots are built by the big robotics companies. However Chinese companies such as GSK, Siasun, etc. are slowing gaining on the market. The accuracy and average MTBF are improving to a level that make these products competitive at least in China.

No doubt the new generation of collaborative robots from UR, ABB, FANUC, etc are all going to be important for significant new growth in Asia. Through use of new technologies such as machine vision, machine learning, … we will see major new growth in robotics, but most of it will be in Asia at least for the short-term.