October 14, 2015      

Japanese robotics maker Yaskawa Electric Corp. and Chinese appliance manufacturer Midea Group Co. are investing 400 million yuan ($63 million) in joint ventures to develop, make, and sell industrial and service robots and related services.

Yaskawa Electric (China) Co., a subsidiary of century-old Yaskawa, will have the majority stake in the industrial automation venture. China is the world’s largest market for industrial robots, with sales of 56,000 units last year, according to the International Federation of Robotics (IFR).

The number of robots operating there is expected to overtake that of the U.S., with approximately 428,000 units in China by 2017. It will eventually top out at about 3 million units, since China currently has a relatively low density of 36 robots per 10,000 human workers.

By comparison, South Korea has 478 robots, Japan has 315, Germany has 292, and the U.S. has 164. The Chinese government wants the nation to achieve the highest density in the world. Industrial automation is also a response to an aging workforce and rising wages. The IFR predicts that by 2018, one in three robots worldwide will be installed in China.

Midea's headquarters in Guangdong, China

China-based Midea is replacing factory workers with robots.

The province of Guangdong in southern China, where Midea and the joint ventures are located, plans to spend 943 billion yuan ($152 billion) to replace human workers in about 2,000 factories.

Yaskawa plans to double the number of robots it makes at its two factories in China to 600 per month. It makes about 2,400 robots per month in Japan.

At the same time, the U.S. is updating its manufacturing capacity with industrial automation to improve productivity and improve its robot density. Rather than view the U.S. as a rival, the two companies see this as an opportunity to reverse the usual relationship between the world’s two largest economies by providing technology to an expanding market.

Midea diversifies into service robots

Midea, which is the largest heating, ventilation, and air conditioning (HVAC) manufacturer in China, will have a majority stake in the service robotics venture, according to the contract it signed with Yaskawa this summer.

Midea is already poised to benefit from rapidly growing demand for air conditioners and refrigerators in China, whose market is growing faster than the rest of the world.

The service robotics venture will develop, build, and sell robots for the healthcare, household, and service industry markets.

Midea’s “smart home + smart manufacturing” strategy is intended to transform the company from a household appliance maker into a “smart” hardware company whose products are integrated with the Web and the coming Internet of Things.

Not only does Midea plan to sell robots, but it will also use robotics to improve its own manufacturing operations. Midea expects its staff to drop from 120,000 today to 100,000 while increasing sales from $23 billion in 2014 to $32 billion.

“It won’t be so much a case of mass layoffs as recruiting fewer people,” said Wu Shoubao, vice president of manufacturing for Midea’s residential air conditioning unit. “Moreover, the people we recruit will have at least a bachelor?s degree, as we need skilled workers to control the robots.”

The company also said that it “hopes that Yaskawa’s technologies and products in service robots help [Midea] find new business, as China addresses the economic impact of a huge aging population in the coming years.”

Developments in artificial intelligence, mobile Internet, and other technologies will lead to rapid increases in global sales of service and household robots from 21,000 units to 134,000 units worth $18.9 billion by 2017, predicted the IFR.

Other Yaskawa moves

Yaskawa also plans to expand its $4 billion robotics business in India, where it currently installs about 400 to 450 robots per year. Yaskawa makes industrial robots and electrical drives in India.

“The size of the total robot installations in India is around 1,500 units per year, and we hold 25 percent of that market’s share,” said Junji Tsuda, Yaskawa chairman and president. “Automation is still fledgling in the country, but [it] will grow. The strategy is all about how to industrialize the country. Right now, labor costs are low, but cost competitiveness is required [for companies], eventually.”

In addition, Yaskawa’s Motoman Robotics division has partnered with R/X Automation Solutions and Universal Robotics for pharmacy order-fulfillment systems. The systems will handle a variety of containers and be able to verify National Drug Code bar codes using Yaskawa’s robots and Universal Robotics’ machine vision and artificial intelligence capabilities.

“This solution leverages the breadth of our robots by using versatile six-axis and high-speed delta models to bring automation to pharmaceutical applications,” said Roger Christian, vice president of business development and marketing at Yaskawa Motoman.