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Mike Deng  |  10/23/2012

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China Moves to Automate Electronics Manufacturing

Exponential growth expected as part of the dragon’s latest five-year plan

With China’s electronics manufacturing industry developing in leaps and bounds each year, the country has become a hub for this industry. Yet with this ascent comes a multitude of new challenges.

Rapid technological development, pressure from rising operational costs, and growing demand for efficient and flexible machinery mean that electronics manufacturing automation equipment is increasingly sought after across the industry. For example, Zoomlion Material Equipment Handling Co. has begun to purchase welding robots to replace expensive welders, and West China Energy will add industrial automation equipment to its production line. Also, Foxconn, a key operator in this labor-intensive industry, has announced plans to replace manual labor with 1 million robots during the next three years.

A labor shortage in China?

The recently concluded NEPCON South China 2012 exhibition demonstrated that, in the face of rising operational costs, especially those for labor, buyers are showing a preference for automation equipment, particularly for use in electronics manufacturing.

Speaking at the exhibition, Huang Shuiling, manager of Rapoo Technology Co.’s automation department, said, “With such fierce competition in the keyboard and mouse market, the only way to make a decent profit is to lower manufacturing costs. For that reason, we’ve introduced automatic production technologies in our keyboard manufacturing processes. During this exhibition, we’ve seen leading suppliers with cutting-edge technologies, as well as the latest products and equipment. We’re increasingly interested in fields like robotics, robot components, and automatic packaging technologies.”

Many buyers visited NEPCON South China 2012 specifically for electronics manufacturing automation equipment. They were impressed by the important role the equipment played in reducing labor costs and improving production efficiency. Recently, because of acute labor shortages, pay rates in China have risen dramatically. This is driving profits down, particularly for labor-intensive enterprises. The resulting pressure has led many manufacturers to invest in automation equipment upgrades, raise automation production, cut workforce sizes, and improve the working environment.

“One piece of electronics manufacturing automation equipment can replace more than 20 workers,” says Wang Xiangfa, workshop administrator at Wenzhou Gangyuan Electronics. “During the two-year automation upgrade, the number of employees in our workshop fell from 1,280 at the end of 2009 to 420. Annual output is up 20 percent.”

The next five-year plan

Su Bo, deputy minister in China’s Ministry of Industry and Information Technology, pointed out that, in line with global economic conditions, international socioeconomic development is undergoing constant changes. These changes are generating huge opportunities and challenges for industry, and exerting a profound influence on industrial transformation and upgrades. In China, industrial development and long-term trends remain positive, but traditional industry models are facing a number of challenges. As a result, optimizing industrial structures through upgrades or transformations has become a necessity.

As part of China’s 12th Five-Year Plan, transforming the economic development model remains key. To do this, production levels from automated manufacturing must increase. During the next few years, automation will develop and spread rapidly. China will accelerate its move away from traditional industrial models based on scale growth, toward a new model dependent on technological progress and sustainable development.

Automation renovation is the main way to transform and upgrade China’s manufacturing industry. This includes design, manufacturing, marketing, and other functions. With the transition to automated production, equipment like industrial robots is expected to make a huge impact on the market.

Automation in electronics manufacturing will grow exponentially

A new report from IMS Research, a provider of market research and consultancy to the global electronics industry, notes that the market scale of China’s automation control systems, including programmable logic controller (PLC), machine vision, human-computer interfaces, servo, step drives and motors, and industrial computers, will reach $21 billion (RMB 131.1 billion) in 2013, with a compound annual growth rate (CAGR) of 12 percent. Of this, the PLC equipment market will be worth $2.2 billion (RMB 14 billion), with a CAGR of more than 20 percent.

As China’s electronics manufacturing industry is upgraded, the use of industrial robots and machine vision systems will sharply rise. Data from the International Federation of Robotics shows that China imported 14,978 industrial robots in 2010, up 171 percent since 2009. China’s annual supply of industrial robots is third in the world; it is also the fastest growing robotics market. Gongkong.com shows that the sales volume of China’s industrial robots saw a year-on-year growth of 51 percent between 2010 and 2011. The growth rate of this market is expected to continue at an approximate annual rate of 28 percent.

In recent years, the world’s advanced robot enterprises have turned their attention to China’s massive market. Apart from long-established industry giants like FANUC, ABB, and Kawasaki, companies like Universal Robots (Denmark) entered the China market in 2011.

In January 2012, Epson signed a strategic partnership agreement with Harbin Institute of Technology on industrial robot R&D, achievement transformation, cooperation, and promotion. On March 6, 2012, Yaskawa Electric, the world’s largest industrial robot production company, established a China location to manage the development, design, and production of industrial robot equipment, accessories, and parts. Also in March, California-based Adept Technology set up Adept Robot Trading Ltd., its first China subsidiary in based in Shanghai.

Speaking of the fast adoption of electronics production automation systems into manufacturing, Thomas Huang, assistant vice president of Reed Exhibitions, said, “Well-known local and international manufacturers in electronics automation equipment production attach great value to the Chinese market. This means that the number of electronics manufacturing automation exhibits at NEPCON events continue to grow, year by year.”

NEPCON China 2013

NEPCON China 2012 featured a dedicated electronics manufacturing automation pavilion that showcased advanced technologies and products. The show was China’s only trade and purchasing platform to provide automation solutions for electronics manufacturers and suppliers. Next year’s event will take place April 23–25, 2013, at the Shanghai World Expo Convention & Exhibition Center. More than 500 leading local and international electronics manufacturers are expected on site, to exhibit various electronics assembly and packaging equipment. Huang confirms that Reed Exhibitions, the organizers of NEPCON China 2013, will invest more resources and again host the electronics manufacturing automation pavilion, which will feature robot and motion-control equipment, electronics manufacturing automation equipment, conveyors, assembly equipment, materials, and quality control applications.

As China starts a new round of economic development, the technological and manufacturing capabilities of its traditional industry are improving, and the number of new industries is growing. The rate of industrial upgrades and optimization of economic structure is gathering speed. So is the integration of industry and information technology. The electronics manufacturing automation revolution is the driving force behind transforming the China brand from “Assembled in China” to “Created in China.”

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About The Author

Mike Deng’s picture

Mike Deng

Mike Deng, the project manager for Reed Exhibitions, is responsible for segment launches and all contributions for NEPCON China, one of the biggest and longest standing trading and sourcing platforms for China’s surface mount technology industry. Prior to Reed Exhibitions, Deng managed the corporate partnership program at JF Pearson, a leading knowledge and skill transfer company.

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