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With Chinese production '40 percent cheaper,' K-robotics lose home turf

Published: 08 Feb. 2025, 06:00

Robots at Yuil Robotics' factory at the Namdong Industrial Complex, Incheon, on Jan. 23 [LEE SU-JEONG]

Articulated robots made in the shape of human arms and gantry robots were bustled around at Yuil Robotics’ factory at the Namdong Industrial Complex, Incheon, on Jan. 23. Robots in development or production filled up the 800 pyeong (28,466 square feet) of space.

In the middle of the plant stood an articulated robot taller than the average adult male. It’s a high-spec product made in Europe. The robotics firm’s employees had been researching overseas examples of the steel coil packaging robots it had been contracted to make for a large company.

The atmosphere seemed, on the surface, quite lively — but the company was troubled. This was because Japanese and Chinese competitors are on the full offensive with their cheap prices, effectively threatening the firm’s livelihood.

“Chinese firms develop technology in a country with a huge domestic market, so they’re coming in with cheap prices; even Japanese firms, whose strength lie in parts, are reducing costs by producing in China,” Oh Min-hwan, director at Yuil Robotics, said.

“At this rate, I’m not sure if Korean robot firms will remain within the next five to 10 years,” Oh said.

Korean firms are already losing contracts to Japanese and Chinese players, who offer cheaper prices. A domestic automobile company chose Japanese firm Fanuc and the China-owned KUKA to supply industrial robots to their factory last March. While the contract's value and conditions were not revealed, industry insiders say the two firms offered prices 30 to 40 percent cheaper than those of local production in China.

Five robotics companies, including HD Hyundai Robotics, filed an antidumping complaint to the Korea Trade Commission on Jan. 10 against Japanese and Chinese firms’ low prices.

“Damages have continuously occurred since 2023,” a spokesperson for HD Hyundai Robotics said, adding that “government support through policies is desperately needed for the survival of domestic robotics companies.”

A small number of firms take up more than half of the global market for industrial robots, which are used at manufacturing facilities such as automobile and electronics plants.

Five companies — Swiss company ABB; Japanese firm Kawasaki, Fanuc, Mitsubishi and Yaskawa; and KUKA, a German manufacturer acquired by China’s Midea Group in 2016 — accounted for 52 percent of the world’s industrial robotics market in 2022, according to industry tracker Statista. The firms held 21 percent, 9 percent, 8 percent, 5 percent and 9 percent market share, respectively.

Korean firms, which were late to the game, have been attempting to expand their share, especially of the small industrial robot sector. But Japanese and Chinese firms have been entering even the low-value-added market with cheap prices, pressuring Korea’s entire robotics industry.

Japanese firms used to sell high-value products but have been offering lower prices, made possible through decreasing costs by producing in China.

“Recently, Fanuc has increasingly bid for contracts with their ‘Made in China’ products manufactured in Chinese factories,” a worker at the Korea Association of Robot Industry said.

KUKA also increased its production in China after it was acquired by Midea Group.

“Fanuc and KUKU are pushing their low-cost products to Korea as domestic demand weakens in China, ” a robotics industry insider said.

A total of $57.16 million worth of industrial robots, including collaborative robots, were imported from China last year, up 42 percent on year, according to trade data from the Korea Customs Service. Small- and medium-sized enterprises, which make up 98 percent of Korea’s robotics firms, are concerned about their survival.

KUKA Robotics' industrial robot [KUKA ROBOTICS]

Korean companies fear the worst

“Japanese premium products press down from above while Chinese goods are selling at unbelievably [cheap prices] from below. There’s no place for Korean robots to squeeze in,” Nau Robotics CEO Lee Jong-ju said. Nau Robotics participated in filing the antidumping suit.

The domestic robotics sector’s annual sales have remained stagnant in the 5 trillion won ($3.5 billion) range for six years after hitting 5.5 trillion won in 2017.

China listed robotics as a key industry for its “Made in China 2025” 10-year plan in 2015 and has since worked toward becoming self-reliant for parts and advancing technology. China increased its domestic production of industrial robots to account for 47.2 percent in 2023 from the 27.3 percent in 2018, according to the Korea Institute for Industrial Economics & Trade (KIET). In 2023, Chinese goods accounted for 80.5 percent of all industrial robots imported to Korea.

Failing to grow the industrial robot technology ecosystem means also giving up the market for humanoid robots to overseas firms. Parts used in humanoids, such as reducers and servo motors, are all derived from robot technology. Humanoids, which combine robotics and AI, are considered a key driver of innovation in manufacturing that could potentially replace conveyor belt-based production methods.

U.S. companies like Tesla and Boston Dynamics currently possess the most advanced technology for humanoids, but China has the upper hand in quickly commercializing the technology. China’s Unitree Robotics already sells a humanoid for $16,000.

“Apart from Rainbow Robotics, no Korean firm has commercialized a finished humanoid product, [indicating a] widened gap in technology compared to the United States and China,” said Kim Yong-gyun, head of Institute for Information & Communications Technology Planning & Evaluation’s AI team.

“We lack both firms that are up for the challenge and policies that could back them,” Kim said.

The government said it would invest at least 3 trillion won in the robotics industry through 2030, funded through public-private collaboration, in its plan announced in January last year. Sector insiders, however, don’t think it’s enough.

“The domestic robot industry lacks policies that encourages collaboration between parts and finished product companies,” said Park Sang-soo, a researcher at KIET.

“The government should actively expand coordinate more projects for demonstrations and distribution to foster the robotics ecosystem,” Park said.

BY LEE SU-JEONG [[email protected]]