Impact of COVID-19 on industrial robotics market size, share, Trends and forecast

The emergence of the COVID-19 pandemic, a deadly respiratory disease that originated in China, is now become a worldwide issue. As China has been the largest market (40–50% share) for industrial robots at least for past 5 years, the COVID-19 pandemic impacted the industrial robotics market negative in 2019 as well. The top players in the industrial robotics market are headquartered in Japan and witnessed a major decline in their 2019 revenue. For instance, in March 2020, FANUC (Japan) announced that its ROBOT division revenue was down 6.9% in 2019 as compared to 2018. The COVID-19 pandemic led to global supply chain disruption and sluggish installation of industrial robots in various key industries, such as automotive; electrical and electronics; and metals and machinery. However, the situation in Q1 2021 would witness a growth over 2020 and is expected to reach normalcy by end of 2022.

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Industrial Robotics Market Dynamics

Driver: Initiatives by governments and public–private companies to mitigate COVID-19 impact

The Advanced Robotics for Manufacturing (ARM) Institute is a public–private association that strives to improve the competitiveness of manufacturers in the US through collaborations and development of innovative robotics solutions. It is funded by the US Department of Defense. The institute has called for rapid and high-impact projects in robotics to support the quick response required for the COVID-19 pandemic. The approved proposals would be funded under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Such stimulating packages encourage firms to develop innovative solutions. The Government of India has provided an incentive of Rs 1.45-trillion package by extending the production-linked incentive (PLI) scheme to 10 manufacturing sectors with main focus on the automobile and automobile components sector. The Japanese government has USD 221 million subsidy as a part of its China exit policy for Japanese companies to shift their base to India and other regions. Under its State Guarantee scheme, the government of France has extended financial help to help companies overcome their liquidity issues by guaranteeing the reimbursement of certain eligible loans up to an aggregate amount of USD 358 billion. Indonesia released two stimulus packages to counter the impact of the COVID-19 pandemic. The first package was introduced in February 2020 totalling US$725 million, and the second package was issued in March 2020 totalling US$8 billion. The second stimulus package was launched to protect the economy and small- and medium-sized enterprises (SMEs), particularly in the manufacturing sector. To combat the detrimental impact of COVID-19 on businesses, the Singapore government will no longer increase the goods and services tax (GST), it will continue to remain at seven percent.

Restraint: High costs of deployment, especially for SMEs

A robotic automation project can be challenging, especially for companies with no prior experience. High capital expenditure is required not only for the purchase of the robot, but also for integration, programming, and maintenance. In some cases, a custom integration may be required, which can further drive up the overall costs. Companies may not always have the necessary space and infrastructure for the deployment of robots. As SMEs are generally engaged in low-volume production, return on investment (ROI) can be challenging. The existence of companies involved in seasonal or inconstant production schedules further exemplifies the issue. Fast-changing consumer preferences will require frequent reprogramming of robots, as products have to be updated yearly on average. Over-automation can also be problematic. For instance, the US automotive industry initially employed a higher degree of automation compared with Japanese counterparts. This led to cost overruns, as product lines and consumer demand changed over time, and many robots became unnecessary or obsolete.  Replacing human workers may not always decrease operational costs for an organization. A single collaborative robot system can cost anywhere from USD 3,000 to USD 100,000. An industrial robotic system costs even more, ranging from USD 15,000 to USD 150,000. The cost of industrial robots, coupled with integration costs and cost of peripherals, such as end effectors and vision systems, makes automation a costly investment for SMEs, especially when they are engaged in low-volume production.

Opportunity: Increasing automation in electronics industry

The increase in automation will enable electronics companies to innovate further, as they will be able to build prototypes with less time and capital. Robots can be used across the entire production cycle in processes such as assembly, dispensing, milling, inspection, packaging, and palletizing. Advancements in end effectors and vision systems are also contributing to the push for robots. For example, random bin picking enables robots to pick unsorted components from bins and mount them as per the required orientation. Currently, factory workers in the electronics industry are still primarily engaged in repetitive and redundant tasks such as hand assembly and tooling. Investing in robotics will change the demands placed on workers, as they can focus on high-criticality tasks, such as final inspection and quality control. Collaborative robots can be integrated into existing production lines, as they can work alongside humans. As these robots are easier to program, they can be reprogrammed for other activities once their use in a specific application is over. Thus, robots provide flexibility and reusability since the product cycles for electronics often last only for a few months. Some companies have built specialized robots. For instance, the KR 3 AGLIUS by KUKA (Germany) is built for fast cycle times in applications such as fitting micro screws, polishing smartphone casings, and handling displays and circuit boards.

Challenge: Interoperability and integration issues with industrial robots

Interoperability is an important function in any factory or manufacturing unit. A modular framework must exist for both hardware and software to connect and coordinate various automation systems. The focus here is on the software used for programming, diagnosing, and monitoring. It is not uncommon for industries to use robot arms from different manufacturers. Companies may also need to reprogram robots due to a change in production and demand or accommodate different parts, such as vision systems and end effectors. It is the responsibility of the integrator, rather than the manufacturer or end user, to decide on the implementation and set up or programming of the robot. Interoperability issues present a big challenge, especially to SMEs, due to their unique requirements and lack of personnel to set up a complex automation setup.