The politics of deglobalisation favours the robots

As the West reindustrialises by re-shoring production that it had outsourced to China, demand for robots – all of which seem to be made in Japan – is booming says this piece in the FT: “…the pressure on companies to build multiple supply chains and reduce dependency on China creates new constraints on the ability to chase cheap labour wherever it is available. In many cases, moving manufacturing to the US or Japan will explicitly put it in places where labour and skills shortages are the most acute. The same dynamics are true in China, where the labour supply and demand gap has been widening steadily.

This, of course, is where robots and factory automation jump in. In the case of brokers trying to sell Japan, it re-enforces the “buy” recommendations on (among many others) robot maker Fanuc and factory automation supremo Keyence. The latter is now the country’s second most valuable company behind Toyota and arguably the one that more clearly represents Japan’s industrial cutting edge.

Since last year, the export volumes of industrial robots from Japan to the US have been rising at an unprecedented rate, with shipments in October and December at record highs. Research by the Association for Advancing Automation found robot sales to North American companies at a record $2.38bn in 2022, up 18 per cent from the year before.

Critically, says Morten Paulsen, a robotics analyst at CLSA, the composition of those exports is changing. The US auto industry remains the dominant source of robot demand but the balance is now shifting towards other industries including semiconductors, food and metals production….

A recent report by Grand View Research found that the global market for machine vision — the cameras, sensors and readers that empower robots and other automation technology — reached $16.9bn last year. Grand View forecast that the industry will exceed $40bn by the end of the decade.”

If you want to read our other published material, please visit https://marcellus.in/blog/

Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.