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Japan-Update

Yaskawa to supply core parts to other robot makers in China

Japanese manufacturer jostles for position in industry's largest market

Servomotors are used in the arm joints of industrial robots.   © Not selection

TOKYO -- Japanese industrial robot giant Yaskawa Electric will start supplying core parts to smaller rivals in China this spring in a strategy to leverage the fast-growing robotics market there.

Besides offering its own robots, Yaskawa will sell machine controllers and servomotors -- key components for robot control -- in packages to several leading robot manufacturers in China. Such an arrangement would effectively support the development of the local industry. In a program similar to the "Intel Inside" campaign by the U.S. chipmaker, the Japanese company is even considering letting Chinese companies use the Yaskawa brand and sales channels when they sell robots containing its parts abroad.

Yaskawa will offer controllers and servomotors for the types of robots that the company does not build, such as scara (selective compliance assembly robot arm) robots, as a way to prevent competition with its own products.

With the move, Yaskawa seeks to lift its global market share of robots and parts to 30% from around 10% at present.

China accounted for nearly a quarter of Yaskawa's consolidated sales -- or 79.8 billion yen ($751 million) out of the 339.8 billion yen total -- in the nine months ended in December. Demand is growing not only for robots but also for servomotors, inverters and other components used in industrial equipment.

Industrial robot sales in China jumped 27% to 87,000 units in 2016, outpacing the 16% global increase, according to the International Federation of Robotics. Chinese sales accounted for about 30% of the total, with the proportion seen rising to 40% by 2020.

Yaskawa, one of the big four players in the world's industrial robotics industry, commands a big presence in China along with the rest of the quartet: Japanese peer Fanuc, Switzerland's ABB and Kuka, the German unit of Chinese appliances manufacturer Midea Group.

But the Chinese government is promoting the domestic industry under its "Made in China 2025" initiative, and local players such as GSK CNC Equipment are said to be successfully improving their technologies. Beijing is also providing subsidies to develop the local industry. This means it is not certain whether and for how long the big four can keep their market shares in China solely by selling assembled robots.

This is why Yaskawa is shifting its business strategy and turning Chinese rivals into partners by selling core parts to them. But the strategy also means that these competitors could eventually catch up with the Japanese company in technology. Yaskawa faces the challenge of protecting its intellectual property assets while keeping its parts competitive.

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