Global Automation_ The latest demand and market share trends in China (YE 2024)

Summary of Key Points from the Conference Call on the Chinese Industrial Automation Industry Industry Overview - The report focuses on the Chinese industrial automation industry and presents trends up to the fourth quarter of 2024 [1][2]. Core Insights and Arguments - Demand Recovery: - Factory automation (FA) demand began to recover in the second half of 2024, with industrial robot shipments growing by 1% YoY [2]. - Collaborative robot (cobot) shipments saw a significant increase of 25% YoY [2]. - The CNC segment experienced double-digit growth, driven by strong demand from consumer electronics and automotive sectors [2]. - Sector Performance: - The AC servo market started to show year-on-year growth in Q4 2024, supported by electronics, consumer products, and export-related products [2]. - The decline in low-voltage variable frequency drives (VFD) narrowed, with improving demand partially offset by declines in property-related sectors [2]. - Small and medium/large programmable logic controllers (PLCs) remained weak due to high exposure to solar and elevated channel inventory from EU/US brands [2]. - Battery and Solar Industry Impact: - Demand from the battery sector turned positive in Q4 2024, while solar demand continued to decline, contributing less than half of its peak from 1.5 years ago [3][9]. - Market Share Dynamics: - Local players are gaining market share in six-axis robots and PLCs, with companies like Inovance and Estun leading in various segments [4]. - Chinese players' collective market share in six-axis robots increased by over 600 basis points in 2024, reaching 44% by year-end [4]. - In small PLCs, Inovance and Xinje became the second and third largest players in the second half of 2024 [5]. - End-Industry Mix: - The end-industry mix for industrial robots remained stable, with automotive and auto parts accounting for high 20s percentage, electronics in low 20s, and new energy sectors in mid-teens [6]. Additional Important Insights - Cobot Applications: The diversification of applications for cobots increased, with the fastest growth observed in food & beverage, semiconductors, and automotive sectors [6]. - Foreign Brand Resilience: Not all foreign brands are negatively impacted by increasing competition from Chinese companies; technology leaders like FANUC and Keyence are managing to defend their market positions effectively [5]. - Market Trends: The report indicates that the overall recovery in the automation sector is broad-based, particularly strong in automotive and electronics verticals, as confirmed by multiple Chinese FA companies [2]. Conclusion - The Chinese industrial automation industry is experiencing a recovery phase, with significant growth in specific segments like cobots and CNCs. Local players are increasingly dominating the market, while established foreign brands continue to adapt to the changing landscape. The report highlights the importance of monitoring these trends for potential investment opportunities and risks in the sector.