A Lingyi iTech factory in Beijing is ramping up production of humanoid robots for various startups.
CNBC | Evelyn Cheng
Hi, this is Evelyn, writing to you from Beijing. Welcome to the latest edition of The China Connection — a snapshot of what I’m seeing and hearing from local businesses.
Humanoids are popping up everywhere, even reshaping a smartphone manufacturer. If it’s a bubble, who survives?
The big story
Just weeks after opening in late April, a humanoid factory in Beijing says it’s already produced 300 robots for clients — as it ramps up toward 10,000 this year.
The 20-year-old smartphone and electronics manufacturer Lingyi iTech aims to expand annual production to 500,000 a year by 2030. Producing robots at that scale could halve the price of a humanoid, which now runs about $30,000, said the company’s Vice President Philip Yang.
Over 100 humanoid start-ups in China are racing to develop household helpers. Some robots can already dance and serve coffee.
The question is: Who is buying them?
The majority of humanoid orders so far are just one or two robots, said Bain’s Beijing-based partner Xin Cheng. He’s watching whether companies make repeat orders.
Chinese authorities are also eager to drum up customers. Beijing opened a showroom in August filled with robots including a soccer-playing humanoid Booster T1 for 199,000 yuan (about $29,400), and a 349,999 yuan R1 Pro made by start-up Galaxea, which can sort packages.
Cumulative orders surpassed 30 million yuan as of late May, a representative for the store said.
But the showroom reflects how broadly humanoids are defined: The Booster T1 is the size of a child, while the human adult-sized R1 Pro has wheels instead of feet.
Software is key
While robot hardware often gets investors’ attention, “embodied intelligence actually hinges on the convergence of AI and robotics,” said Lian Jye Su, a chief analyst at Omdia. He noted companies such as UBTech and Fourier offer open-source robotics software.
Nvidia is launching a robotics system for developers later this year in collaboration with humanoid manufacturer Unitree, which is planning a Shanghai IPO in the coming weeks. It’s Nvidia’s attempt to keep a foot in the “physical” AI world, after dominating AI development with its processors and CUDA software system.
For Chinese companies, software is just a layer of humanoid development that adds to systems for manufacturing, low-priced parts and gathering training data according to Bain’s Cheng.
“The humanoid is not a single product. It is an ecosystem,” he said.
Government-backed centers in Beijing and other parts of China are training robots, with people guiding them through daily tasks so that the machines can learn from real-world applications and replicate them in the future. A representative for one state-backed data collection center told me it is also working to provide the robot training data to partners in South Korea and Germany.
These developments offer a glimpse into how China’s rapid humanoid development has global implications. Lingyi’s Yang said the company, whose current operations include a Texas factory for power outlets, plans to open a humanoid facility overseas. Meanwhile, Unitree already claims about 40% of its revenue comes from outside China.
But even as Chinese regulators warn of a bubble in the humanoid industry, it appears to have become a politically correct business to participate in.
“The Chinese humanoid companies carry the mandate from the government to craft this image of China as a strong industrial economy that has deep tech capability and deep tech expertise,” Omdia’s Su said. “They receive government support just for carrying that flag or carrying that mandate.”
That may impact who survives the global humanoid race.
Need to know
Hong Kong’s IPO boom is developing a performance problem
Out of 30 Hong Kong-listed stocks that joined the Connect in early March, eight surged by more than 300% between their IPO and the last trading day before inclusion, but have dropped by 10% or more since. Meanwhile, China is making it harder for retail investors to steer money to U.S. stocks.
U.S. proposes fresh tariffs on China and dozens of other economies
The Office of the U.S. Trade Representative has proposed additional tariffs of up to 12.5% on imports from 60 economies including China over failure to ban goods made with forced labor.
Hidden beneath AI chips, Chinese-made circuit boards raise national security concerns in U.S.
New legislation would incentivize AI companies to buy American, with a 25% tax credit and $3 billion for U.S. PCB makers like TTM.
Goldman Sachs cuts Hong Kong stocks in favor of mainland China AI hardware plays
Goldman Sachs is officially preferring mainland Chinese stocks to those traded in Hong Kong.
Coming up
June 9: Trade data
June 10: CPI, PPI
June 16: Retail sales, industrial production and investment data for May
