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SFAW 2024: South Korea’s pressing demand for automation and robotics

Industrial Automation

April 2024

SFAW 2024: South Korea’s pressing demand for automation and robotics

Jan Zhang

Senior Research Director

With a 20-year background in industrial design and strategic research leadership, Jan brings a deep and diverse set of research skills to the table. She heads up our APAC operations and is a Senior Research Director for our Industrial Automation and Robotics research groups.

Samantha Mou

Research Analyst

As a Research Analyst based in China, Samantha provides support in the Industrial Automation sector. Samantha brings with her a master’s degree in Economics, and has experience, whilst working in Germany, conducting market research in Industrial Equipment and Automobile Components.

Smart Factory Expo + Automation World (SFAW) is one of the most influential industrial automation exhibitions in Asia. SFAW 2024 took place from March 27 to 29 in Seoul. The show featured around 500 exhibitors showcasing innovative technologies and solutions in the fields of factory automation, robotics and machine vision.

Analysts from Interact Analysis attended SFAW and had numerous discussions with manufacturers at the show. Here are our key takeaways:

Market sentiment: Cautious outlook for 2024

Similar to the global picture, the manufacturing industry in South Korea encountered multiple challenges in 2023. There have been severe labor shortages and high labor costs, due to an aging population and declining fertility rates. We observed a marked and long-term demand for automation and robotics in the South Korean market.

However, South Korea has also been suffering from weak domestic demand in 2023. Looking ahead to 2024, many South Korean manufacturers expect sales to improve in real terms only towards the end of the year, after the U.S. presidential election has taken place. Before that, many expect the recovery in investments and demand to remain sluggish. The performance of the semiconductor industry will be pivotal when making forecasts for the South Korean market in 2024.

Characteristics of the Korean Market

Both market data and our interviews with automation vendors indicate a high level of concentration in application industries and end-users within the South Korean market.

Application Markets: In the manufacturing sector, vendors are mostly targeting the automotive, semiconductor and EV battery industries; as for non-manufacturing industries, we saw a variety of demonstrations targeting logistics and food companies.

Customers: The customer base in South Korea is very concentrated. In short, it consists of Samsung, Hyundai, SK, LG, the subsidiaries of these groups, and “others”.

Overseas sales: South Korean manufacturers have very close relationships with the U.S. market, as well as being active in the Chinese and European markets. When establishing overseas entities, priority is given to the U.S. and Chinese markets, while many Korean vendors prefer to partner with local integrators or distributors in the European market.

Product portfolio: While South Korean manufacturers have a strong focus on several key industries, they offer a comprehensive range of solutions within these sectors. Compared with Chinese vendors, we found the product and solution configurations from South Korean suppliers are more standardized.

Product trends – Industrial Automation

Automation

Automation system suppliers are taking advantage of artificial intelligence to lower barriers to adoption. For example, Siemens showcased its Industrial Copilot, unveiled at SPS 2023, which enables programming codes to be generated with natural language. Combined with the virtual PLC product exhibited at the show, we see a clear signal that Siemens is positioning itself as software provider and moving towards solutions for the ‘industrial metaverse’. Another example is the MELSOFT MaiLab software from Mitsubishi Electric, which is powered by AI and enables automatic on-site production data analysis and diagnostics.

An additional trend we observed is the emphasis on integrated control of automation system and components. Siemens showcased a robot picking system that integrates robot control into its standard TIA platform using Siemens’ Robot Library, which already supports the control of various robot models from KUKA, Stäubli, Denso and Yaskawa. Similarly, Beckhoff demonstrated integrated control of machine, robots and vision system at SFAW 2024. The company launched its own machine vision hardware in 2022, making it a leading player in terms of integrating vision components into automation systems.

Left: Siemens robot control platform. Right: Beckhoff vision system

LS Electric was the largest Korean automation company among the SFAW exhibitors. The company focused on displaying its complete solutions for factory automation in digital format and presented minimal physical demonstrations at its booth. The solutions showcased at the booth also focused on key industries such as automotive, EV batteries and semiconductors.

Smart Conveyance Technology

Since last year, smart conveyance systems have become one of the most popular products at automation tradeshows in China, with numerous new suppliers entering the market and exhibiting their products. At the Korean show, we found the landscape was less diverse, with predominantly Western companies showcasing smart conveyance systems, for example, Bosch Rexroth, Rockwell, Beckhoff, and Planar Motor.

Beckhoff demonstrated its XTS smart conveyor line combined with Non-Contact Transfer (NCT) technology. Using NCT, end effectors such as grippers can be attached to the movers without cables, enabling movers to function as processing stations. This gives the smart conveyance system the possibility to function as a multi-robot system, which may even compete with small payload robots.

In addition to these companies, Chinese smart conveyance vendor, Golytec, made its debut in the Korean market through a local distributor.

Smart Conveyance systems. Left: Beckhoff; right: Bosch Rexroth.

Machine Vision

Chinese camera vendors had a strong presence at the show, but there were many Korean integrators exhibiting comprehensive product displays and applications. The presence of European and Americas brands at the show was largely through cooperation with distributors.

Robotics Industries

Automation and robotics represent critical needs within the domestic market.

The challenge of labor shortage persists in South Korea despite the country having the highest robot density and leading installations of industrial robots globally.

The South Korean government is providing strong support for the advancement of the robotics industry and adoption of robotic technologies. As reported by South Korean media in January, the government unveiled the Fourth Basic Plan for Intelligent Robots, spanning 2024 to 2028. The objective is to invest over 30 trillion Korean won (equivalent to approximately $22.4 billion USD) in both the public and private sectors by 2030, facilitating the deployment of one million robots across diverse industrial and social sectors. The initiative aims to generate further growth of the robotics industry in South Korea.

US is one of the key overseas markets for Korean companies.

The United States, along with regions hosting American manufacturing operations, is a crucial overseas market for Korean robot manufacturers. Amid trade tensions between the United States and China, the U.S. is emphasizing domestic production and exploring nearshore manufacturing. Some factories are relocating to ASEAN countries, while new facilities are being established in India and Vietnam.

All these initiatives provide market opportunities for South Korean robotics and automation manufacturers.

Product offerings – Robotics

Mobile robots

In recent years, Korean manufacturers have made significant strides in the field of mobile robotics. Through our interviews, we’ve uncovered that the market now boasts over 20 active mobile robot suppliers, most of which have introduced their products within the last two years.

The emphasis of SFAW 2024 on smart factories and automation led to a range of displays and solutions tailored specifically for manufacturing environments. These applications underscore Korea’s strengths in industries such as automotive, electronics, semiconductors, and machining, with additional sectors, including chemical and food & beverage, prioritizing material handling.

Notably, SLAM-based mobile robots using LiDAR took centre stage at the exhibition, showcasing maximum payloads for material handling ranging from 100 kg to 1.5 t. Additionally, a small selection of automated forklifts and AMR+Arm robots were also on display. Products were accompanied by detailed and deployable scenarios, highlighting the impressive advancements made by Korean manufacturers in the realm of individual robotic solutions in recent years.

Mobile Robot vendors at SFAW 2024.

Collaborative robots and industrial robots

Rainbow Robotics unveiled a new humanoid robot model, the RB-Y1. This is a dual-arm robot with a single leg and a wheeled mobile base. Each arm has 7 axes and a payload of 3 kg. The robot’s single leg features 6 axes. In a demo video, Rainbow showcased the capabilities of RB-1 for tasks like refilling water, cleaning desks and handling cases in industrial warehouses.

Rainbow Robotics has a portfolio of collaborative robots, service robots, quadruped robots, and the bipedal humanoid robot HUGO. According to Interact Analysis’ ‘Collaborative Robots’ report, Rainbow Robotics ranked among the top five Korean manufacturers in the collaborative robot market in 2023.

We anticipate that humanoid robots will be industrialized in dual-arm form, with mobile bases and grippers, because the scenarios with the most urgent need for automation are those tasks that require “arms”. In last year’s International Robot Exhibition (IREX) in Japan, most of the exhibited humanoid robots took this form. The development trajectory of humanoid robots may slightly differ from that of industrial robots. Given that their usage scenarios often demand lower speed and precision compared with certain industrial settings, the hardware requirements for humanoid robots may be more easily attainable. Instead, breakthroughs and advancements in software, including control systems and AI-driven capabilities, are likely to play a crucial role in their development.

Rainbow Robotics unveiled a new humanoid robot model

Regarding other Korean robot vendors, Hanwha Robotics showcased its collaborative robots designed for both industrial applications and service scenarios, such as pouring wine and making coffee. Meanwhile, Neuromeka presented collaborative robots tailored for welding and food applications.

In terms of robot components, Korean vendors specializing in force and torque sensors, as well as end effectors, had a notable presence at the show. Additionally, we observed Korean industrial gearbox suppliers expanding their offerings into the robot market.

In the software realm, a Korean startup demonstrated the use of AI to enhance robot hardware performance. The company leveraged AI technology to simulate human actions and train robots with optimized force control. Through this approach, even with the same force/torque sensor, robots could execute tasks with enhanced precision following optimization with the AI-based software.

Final Thoughts

As the fourth largest economy in Asia, South Korea has a mature industrial sector and a clear demand for automation and robotics. Manufacturers have leading solutions for their key markets – automotive, electronics and semiconductors. South Korea welcomes international brands to its home market, while local vendors are actively going overseas, especially to the US market.

Images: Interact Analysis, taken at SFAW 2o24.

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