Collaborative robots: riding the automation wave

Continuing our work on warehouse robotics and mobile robotics, we look at collaborative robots (cobots) as another pillar of the robotics theme. First developed to collaborate/co-work with humans, cobots are no longer restricted to this scenario. We forecast Chinese cobot shipments volume to see a CAGR of 34% from 2022-26E, outpacing general industrial robots (IR) at 17%, to reach 76k units in 2026E. Categorised as a type of IR, cobots' main applications are still in industrial sectors, but demand from non-industrial use (including healthcare and energy) has improved and is accelerating. Compared to other industrial robots, most cobots feature higher safety standards. The deployment process is usually easier and more flexible due to the lighter range of power/force, precision and payload.

China's cobot market is seeing strong support in both supply (led by policy and improvements in technology) and demand (led by demographic/labour force changes and the need to manage manufacturing costs). We also see demand rising in non- industrial verticals such as healthcare, catering and energy. The cobot market has become more active and homegrown makers more competitive (UBS Evidence Lab data shows their domestic market share jumped from 35% in 2017 to 73% in 2021). Compared to foreign companies, Chinese companies have substantially narrowed the gap in hardware but have yet to catch up in supporting software.

Besides manufacturers, major beneficiaries of the cobot trend include upstream components and software vendors, as well as downstream adopters from various verticals. We believe components makers, especially those in segments with high entry barriers such as harmonic reducer, could benefit most from a ramp-up in cobot deployment. From a downstream perspective, our analysis shows attractive returns on cobot investments with payback periods of less than two years.

With the recent introduction of humanoid robot has sparked market discussion and interest in the space. But given their high price, we think humanoid robots' utility or benefits would need to be comparable to big-ticket items like autos to see large shipment volumes in the 2C market. The robotics theme is evolving quickly and innovation lies at the core of industry development. As use scenarios and deployment costs improve with technology, we think so will the adoption of robots, be it cobot, humanoid or another type of robot.

We spoke to seven cobot-related experts for a read on the progress in cobot technologies, the competitive landscape and supply-chain localisation. We also leverage UBS Evidence Lab's China Industrial Automation Market Monitor and China Labour Market Survey.