Factory & Warehouse Automation:
While 2020 was not kind to many industries, robotics and automation companies continued to thrive. Indeed, as the COVID-19 pandemic broadly accelerated the adoption of robotics and automation technologies, several key themes stand out as likely to accelerate their momentum in 2021. Among those that appear to be nearing an inflection are factory and warehouse automation, and autonomous systems.
With respect to the factory and warehouse automation theme, following a worldwide decline in capital spending among auto and electronics manufacturing companies in 2019, the coronavirus pandemic further exacerbated the situation in 2020. Yet, according to annual installation estimates from World Robotics, these two key factory robotics verticals, appear poised to accelerate their capex spending in 2021. Demand from China, the largest market for factory robots with more than 140,000 annual installations from 2017-2019, has already seen an acceleration in the back-half of 2020, while Europe and the US appear to have stabilized.
The total addressable market for factory robots is huge, with a global installed base of just over 3 million units compared to an estimated 360 million human factory workers. That’s about 0.8 robots per 100 factory workers. Comparatively, that leaves a lot of runway left to cover when one considers the fact that South Korea has already deployed 8.6 robots per 100 workers. Driven by the digitalization of production systems, a shortage of skilled workers, and an accelerated adoption rate of factory automation technology in the post-COVID world, as the global economic recovery continues, our research suggests that double-digit growth should continue for at least the next 5 years.
Pandemic-driven investment in technology to boost warehouse and distribution center efficiencies is also being deployed by both in-house and third-party logistics and warehouse service centers in order to keep supply chains in motion and costs and operational complexity in check. The disruption of consumer supply chains is driving a surge in new demand for specialized warehouse space as ‘Just-in-Time’ inventory strategies shift to ‘Safety Stock’ inventory strategies. This will require an estimated 750 million square feet of additional industrial space outfitted for automated materials handling, picking and sorting, packaging, storage, and transportation. World Robotics expects sales of autonomous mobile robots to double by 2025.
Some of the fastest growing industrial robotic systems and components producers include: Fanuc, Yaskawa Electric, Infineon Technologies, and Harmonic Drive Systems, to name a few. On the warehouse automation front, Daifuku continues to be a strong company.