Page 330 - 2021 White Paper
P. 330
1 White Paper on the Business Environment in China
such as auto manufacturers and electronic to accelerate its own AI robotic research and begin
component makers (Fannin). planning for the day when China will no longer be
supplying many of the things we need in our daily
The Chinese government wants to transform lives (Bajarin).
China from a manufacturing giant into a world
manufacturing power according to the ten-year Semiconductors
national Made in China 2025 plan. The plan includes
strengthening Chinese robot suppliers and further China's rising investment in the semiconductor
increasing their market shares in China and abroad. industry is growing. New fabs or capacity
China intends to forge ahead and make it into the expansion will exceed US$160 billion in China over
world’s top 10 most intensively automated nations the coming 5-7 years, driving an increase in China's
by 2020. By then, its robot density is targeted to rise equipment spending to more US$40 billion in 2025,
to 150 units – this being the number of industrial with 60% of the investments going to memory
robots per 10,000 employees. Today, South Korea fabs. The expansion of product offerings by local
is the leader regarding robot density in Asia, with equipment companies will result in significant
531 robot units. In the Americas, it is the USA with growth opportunities over the coming five years.
176 robot units and in Europe, it is Germany with China has made some progress in developing its
301 robot units. The main drivers of the latest domestic fabless industry, though is still dependent
growth in China are the electrical and electronics on importing the final manufactured product
industry. Sales increased by 75% to almost 30,000 in several cases. It has also reduced its import
units (2016). About one third of the robots were dependence in some areas by encouraging global
produced by Chinese robot suppliers, who more producers to set up manufacturing within China to
than doubled sales by almost 120%. All international serve both its local demand as well as use China as
robot suppliers also increased sales considerably to an export base. Most noticeably in recent years has
the electrical and electronics industry (+59%). This been the setting up of memory plants by Samsung,
remarkable demand will further grow in the future. Hynix, and Intel in China that has resulted in a
Major contract manufacturers of electronic devices strong CAGR of memory exports from China.
have already started to automate production. The However, given the continued growth of domestic
semiconductor and the chip industries, for example, tech demand as well as Chinese brand's rising
have strongly invested in automation. Large battery share of end tech products in the global market has
production facilities are being installed to meet the meant that China's demand for semiconductors
increasing demand for electric and hybrid cars has outpaced the growth of its domestic semis
(IFR). production and has increased demand for semi
parts that it does not locally produce, resulting
China already has an edge in manufacturing in larger net import of semiconductors. Roughly
and while the US companies could move much 70% of all tech-related imports by China are of
of their manufacturing to countries like Vietnam, semiconductor products, thus, making it highly
Malaysia, India and Mexico, there will be a push dependent on foreign-sourced parts. Several of
to bring much of that manufacturing capability to these imported semiconductors are also meant for
the US over time, should we end up with a split powering its technology related exports (handsets,
supply chain. However, if the goal is to bring telco equipment, and consumer electronics). China
manufacturing jobs back to the US, China’s robotic also imports most of its equipment required for
push hints at the fact that the US would also mostly semi and display manufacturing and currently
deploy their version of AI-based manufacturing has limited capability to manufacture any of
robotics to stay competitive. That would translate these equipment companies locally. Thus, not
fewer manufacturing jobs for humans and more surprisingly, the focus of Chinese authorities, in
for robots. Given the political goals of China to the past decade or more, has been to develop a
dominate the world in so many areas, and robotic local semiconductor industry. While focusing on
manufacturing being one of the significant ones developing a domestic semiconductor, industry
they are pursuing, it does seem that we may soon has borne some fruit - local semis production
see this dual supply chain emerge. The US needs
330
such as auto manufacturers and electronic to accelerate its own AI robotic research and begin
component makers (Fannin). planning for the day when China will no longer be
supplying many of the things we need in our daily
The Chinese government wants to transform lives (Bajarin).
China from a manufacturing giant into a world
manufacturing power according to the ten-year Semiconductors
national Made in China 2025 plan. The plan includes
strengthening Chinese robot suppliers and further China's rising investment in the semiconductor
increasing their market shares in China and abroad. industry is growing. New fabs or capacity
China intends to forge ahead and make it into the expansion will exceed US$160 billion in China over
world’s top 10 most intensively automated nations the coming 5-7 years, driving an increase in China's
by 2020. By then, its robot density is targeted to rise equipment spending to more US$40 billion in 2025,
to 150 units – this being the number of industrial with 60% of the investments going to memory
robots per 10,000 employees. Today, South Korea fabs. The expansion of product offerings by local
is the leader regarding robot density in Asia, with equipment companies will result in significant
531 robot units. In the Americas, it is the USA with growth opportunities over the coming five years.
176 robot units and in Europe, it is Germany with China has made some progress in developing its
301 robot units. The main drivers of the latest domestic fabless industry, though is still dependent
growth in China are the electrical and electronics on importing the final manufactured product
industry. Sales increased by 75% to almost 30,000 in several cases. It has also reduced its import
units (2016). About one third of the robots were dependence in some areas by encouraging global
produced by Chinese robot suppliers, who more producers to set up manufacturing within China to
than doubled sales by almost 120%. All international serve both its local demand as well as use China as
robot suppliers also increased sales considerably to an export base. Most noticeably in recent years has
the electrical and electronics industry (+59%). This been the setting up of memory plants by Samsung,
remarkable demand will further grow in the future. Hynix, and Intel in China that has resulted in a
Major contract manufacturers of electronic devices strong CAGR of memory exports from China.
have already started to automate production. The However, given the continued growth of domestic
semiconductor and the chip industries, for example, tech demand as well as Chinese brand's rising
have strongly invested in automation. Large battery share of end tech products in the global market has
production facilities are being installed to meet the meant that China's demand for semiconductors
increasing demand for electric and hybrid cars has outpaced the growth of its domestic semis
(IFR). production and has increased demand for semi
parts that it does not locally produce, resulting
China already has an edge in manufacturing in larger net import of semiconductors. Roughly
and while the US companies could move much 70% of all tech-related imports by China are of
of their manufacturing to countries like Vietnam, semiconductor products, thus, making it highly
Malaysia, India and Mexico, there will be a push dependent on foreign-sourced parts. Several of
to bring much of that manufacturing capability to these imported semiconductors are also meant for
the US over time, should we end up with a split powering its technology related exports (handsets,
supply chain. However, if the goal is to bring telco equipment, and consumer electronics). China
manufacturing jobs back to the US, China’s robotic also imports most of its equipment required for
push hints at the fact that the US would also mostly semi and display manufacturing and currently
deploy their version of AI-based manufacturing has limited capability to manufacture any of
robotics to stay competitive. That would translate these equipment companies locally. Thus, not
fewer manufacturing jobs for humans and more surprisingly, the focus of Chinese authorities, in
for robots. Given the political goals of China to the past decade or more, has been to develop a
dominate the world in so many areas, and robotic local semiconductor industry. While focusing on
manufacturing being one of the significant ones developing a domestic semiconductor, industry
they are pursuing, it does seem that we may soon has borne some fruit - local semis production
see this dual supply chain emerge. The US needs
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