Goldman Sachs (“GS”) has released a series of research reports in 2016 centered on The Factory of the Future.
The series which they call ‘Profiles in Innovation’ examines six technologies GS believe is driving transition, from “Cobots” to 3D printing to Virtual and Augmented Reality to the Internet of Things, and how these technologies could yield more than US$500 billion of cost savings.
As part of the GS team’s investigations they hosted a Factory of the Future field-trip for investors at Automatica trade fair in Munich, Germany on June 25, 2016. They subsequently provided a synopsis of their key observations.
Here are the top takeaways from GS’s field trip to Automatica related to Robots.
Universal Robots (“UR”)
- Universal Robots’ cobots have a payback of 6 months and overall installation costs at <2x cost of robots vs. >3x for traditional robots. Cheapest UR cobot costs just €20k.
- Universal Robots believes its sales network, brand and open-source strategy will be important to lock-in and outgrow the cobot market.
- Amidst its own impressive growth, Universal Robots is preparing for tougher competition.
Universal Robots, Teradyne’s market leading collaborative robots business, hosted a booth tour. Key takeaways were:
- With the cobot market growing >50% pa in recent years, Teradyne (owner of UR) is targeting $90 million to $100 million in revenues for Universal Robots for 2016. UR believes this fast growth is unlikely to hit capacity constraints as its current Denmark-based manufacturing set-up can generate $500 million in revenues without the need for significant factory cap expenditure.
- The customer base for Universal Robots consists largely of SME enterprises in a wide range of end markets. As a result, its method-to-market and ease-of-use is key to achieving rapid organic growth. It uses distributors (which pick up servicing margin in return for broad dissemination) and a user-friendly set-up, eliminating the need for third party engineers to program the robot.
- Universal Robots believes that its technology is 2-3 years ahead of competitors (15 other booths at the fair were using UR cobots), however it is aware that the competition is increasing significantly. Leveraging Teradyne’s balance sheet they believe acting quickly and the use of their open-source platform (meaning that a wide range of components are easy to develop, described as an “App store” approach) is key to dominating this quickly evolving market.
- Cobot competition is picking up as Yaskawa entered the race and Fiat Chrysler’s Comau are pioneering solutions to concerns about speed.
- Yaskawa demonstrated five of its new product launches, underpinning our growth expectations and mix improvement as it increases appeal in general industry.
Yaskawa hosted a booth tour and interview with its EU operations management. The company exhibited several new products:
- 10 kg payload collaborative robots
- 7-axis robots with the newest spot welding gun and smaller, low pay-load robots ideal for general industry.
- Motologix software (bridging machine communication between controllers and PLCs (programmable logic controller) – based on VIPA (acquired German company PLC technology).
Goldman Sachs, who said they came away with a great deal of confidence in Yaskawa’s product mix, also offered the following key takeaways:
- Looking at collaborative robots specifically, GS believe the company has strong positioning as one of the ”Big Four” robotics company. They believe pricing is reasonable at €38,000 for 10kg weight handling, with sensors implemented in all axis and easy teaching system. Given that many start-up companies were introducing cobots with, in the GS teams opinion, inferior quality and yet similar pricing (€20-40,000 per unit), GS felt Yaskawa is well positioned to capture the growth of the cobot market.
- Yaskawa sold 25,000 robots in 2015; which GS estimate that Yaskawa has circa 10% market share (note these will be mainly premium robots), bringing Yaskawa’s total installed base to 350k.
Other general observations by the Goldman Sachs team
- Despite the absence of a major global robotics player, the US (where robotics is growing double digit) is still at the forefront in automation, by developing the embedded technologies required.
- Beware of the buzzwords: Most notably, AI and cloud robotics. Association for Advancing Automation thinks it might take decades to get commercializable AI products.
- Machine vision is a >$2 billion market, despite in a current downturn, according to the Association for Advancing Automation.
- Flexibility and efficiency are crucial in leading autos factories, as BMW produces a car in 44 hours with no two likely to be the same each day.
- The average age of workers in BMW’s Welt factory is rising (43 vs. 40 a few years ago) as new technologies, such as exoskeletons, are increasing the longevity of employees.
Check out Goldman Sachs briefings and video for additional information.