Leaderdrive (绿的谐波, 688017.SH), one of the largest manufacturers of harmonic reducers in the world, recently collaborated with Sanhua Group (三花智控, 002050.SZ), to set up a joint venture in the latter’s industrial park in Mexico to build and sell harmonic reducers, Chinese media reported yesterday.
Considering that Ningbo-based Sanhua Group is a core supplier of thermal management system for Tesla and already present in the robotics sector, market pundits believe that the joint venture formed with Suzhou-headquartered Leaderdrive will also enter Tesla’s supplier list.
Harmonic reducer is a key part of a robot, typically placed on its arm, wrist, or hand. The main function of the reducer is to improve the working accuracy and torque of the robot.
Citic Securities, a leading brokerage firm in China, said in a research note that the tie-up between the two market leaders could help slash the costs of key components and bolster the supply chain for the robotic industry through economies of scale.
Meanwhile, the joint venture will also play a demonstrative role, encouraging other players to venture into robotics, Citic Securities said.
Zhou Ershuang, an analyst with Soochow Securities, argued that Sanhua Group, as Tesla’s supplier, has close links with overseas clients and thus possesses advantages in distribution channels and customer base.
According to a filing by Sanhua in February this year, the group had already branched out into robotics, starting with research and development of motor-driven actuators on robots.
Leaderdrive could bank on Sanhua’s ties with North American clients and its local distribution advantages to tap into global markets together, Wang Huajun, an analyst with Zheshang Securities, wrote in a research note.
Telsa’s launch in October 2022 of its humanoid Tesla Bot, or Optimus, has sparked a frenzy throughout the robotic industry, sending the shares of key component producers like Leaderdrive flying.
Despite multiple iterations to the Optimus prototype, Tesla is nowhere near the point of realizing mass market adoption for the gadget as for its electric cars.
Nor is there any definite news proving that Chinese manufacturers have entered Tesla’s robotic supply chain.
Somehow, analysts tend to be upbeat about the prospects of humanoid robots, and the implications they will have for key parts suppliers like Leaderdrive.
Soochow Securities predicted that the global demand for harmonic reducers will reach 2.99 million, 4.67 million and 7.38 million units in 2023-2025, while the robotic sector will face a shortage of 1.20 million, 2.63 million and 5.01 million units during the same period.
Humanoid robots have big potential to become the ultimate carriers of AI, as innovations such as ChatGPT have tremendously boosted the ability of robots to converse in natural language like a real human.
Amid a mania over AI-powered humanoid robotics, China’s opportunities lie in growing its supply chain for key parts, said Sun Boyang, an analyst with GF Securities.
Assuming that humanoid robots evolve into a consumer-grade product, selling 100,000, 500,000 and 1 million units at certain points in the coming decade, the global market for reducers will expand by 3.1 billion, 12.5 billion and 17.5 billion yuan (US$2.54 billion), respectively, according to Sun’s estimates.
He also projected that at least 7.5 billion yuan in the third scenario will go to harmonic reducers.
