Nine key points for humanoid robot industry investment in 2024

In 2024, humanoid robots usher in the inaugural year of industrialization. In October 2022, Tesla unveiled the prototype of the Optimus humanoid robot, and in November, ChatGPT was introduced. The integration of AIGC with humanoid robots opens up endless possibilities for embodied AI. In 2023, the technology of Optimus continued to iterate: a Gen1-Demo1 video was released in April, a Gen1-Demo2 video in September, and a Gen2 video in December. Each advancement garnered significant market attention. In 2024, Tesla plans to deploy humanoid robots in factories, and domestic companies UBTECH and Zhiyuan Robotics announced their intention to enter factory industrialization verification. At the start of the new year, Sanhua and Top Group successively announced investments of 5 billion yuan each to build robot core component manufacturing bases in China, marking the inaugural year of industrialization for humanoid robots. In 2024, we adhere to the core industrial logic of "hardware design innovation + cost reduction through Chinese manufacturing," focusing on the development trends of the "3+3" core components, and summarize the nine key points of the humanoid robot industry in 2024, together embracing the wave of humanoid robot industrialization.

1. In 2024, humanoid robots usher in the inaugural year of industrialization

According to statistical bureau data, as of 2022, the robot density per 10,000 workers in China is close to 400 units, which seems to leave little room for growth compared to South Korea, the country with the highest robot density globally (1,000 units per 10,000 workers). This refers to industrial robots used as specialized equipment. On July 6, 2023, at the World Artificial Intelligence Conference, Musk proposed: "At some point in the future, the ratio of robots to humans may exceed 1:1." The robots Musk referred to are AI robots (embodied intelligence).

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AI robots are intelligent entities with physical bodies that support physical interaction. The future forms of AI robots will not only include humanoids but also wheeled robots, force control robots, vision robots, welding robots, polishing robots, domestic service robots, and more. Humanoid robots are one of the important forms of AI robots. In the future, AI robots will not only replace a large amount of manual labor but also some specialized equipment. The entry of AI robots into households will lead to a surge in demand. In 2023, the humanoid robot Digit entered Amazon's factory for verification, and in 2024, Tesla's humanoid robots, UBTECH, and Zhiyuan Robotics are expected to enter Tesla and BYD factories for commercial verification, marking the inaugural year of industrialization for humanoid robots.

2. Two major conditions for the industrialization of humanoid robots: "technical feasibility and cost accessibility"

Is the high manufacturing cost one of the important factors restricting the development of the AI robot industry? We believe that with production volume, costs can be reduced, and scale is inversely proportional to cost. The key question is: why produce so many AI robots? The key is to innovate in hardware technology to produce AI robot products that meet the real needs of downstream applications. AI robot products that meet real downstream needs must have: "a flexible and efficient body (high energy density hardware) + a smart brain (algorithms)," two major conditions, and the technical bottlenecks to achieve this include: large model data acquisition, hardware control algorithms, and hardware design innovation.

3. Three major technical bottlenecks for humanoid robots: data acquisition, motion control algorithms, and hardware innovation

Whether entering factories or households, humanoid robots need to address three technical bottlenecks: 1) The speed and cost of large model data acquisition: The data needed for robot large models come from real needs and scenarios, and the cost of data collection is high and slow, making data collection the first difficulty. 2) The unity and accuracy of hardware control: When humanoid robots perform specific tasks, they need to address accuracy and timeliness. There are challenges in AI's task/motion planning and the unity and accuracy of hardware control. 3) A flexible and efficient body requires high power density hardware. It is also a direction that technology needs to explore to output the highest power hardware products under certain volume and cost conditions. In addition, social ethics, legal, and regulatory issues arising after humanoid robots enter households also need to be resolved.IV. Core Logic of Humanoid Robot Industrialization: "Hardware Design Innovation + Cost Reduction through Chinese Manufacturing"

Hardware technology innovation and cost control are the core logic of the current humanoid robot industry. China has a mature manufacturing industry chain, and Chinese manufacturing is one of the main ways to reduce costs. Looking at the cost composition, the three major components of automated control (drive control and actuator components) account for nearly one-third, various types of sensors account for one-third, and software accounts for nearly one-third. Considering the "single machine value + domestic substitution + technical barriers" three major factors comprehensively, we have summarized the key "3+3" core components of humanoid robots: the first 3 refers to the three major components of automated control: electric motor control + actuators (harmonic drive reducers, planetary roller screw); the second 3 refers to the three major sensors: force sensors, tactile sensors, and visual sensors. The technological breakthroughs and innovations in these hardware fields, as well as the progress of import substitution and cost reduction, are important focuses for the industrialization of humanoid robots.

V. Components: Focusing on Technological Innovation and Import Substitution of "3+3" Core Components

The technical barriers of the "3+3" core components range from high to low, which we believe are: multi-dimensional force/touch/visual sensors, planetary roller screws, harmonic drive reducers, frameless torque motors, and hollow cup motors. Sensors are a platform technology product, and the main technical barriers are reflected in: structural design, calibration algorithms, and decoupling algorithms; the technical barriers of tactile sensors are reflected in: flexible materials, processes (MEMS process is the direction), and decoupling algorithms.

The main barriers for planetary roller screws and harmonic drive reducers are reflected in: materials, processing technology, and key equipment. For motor products, the main barriers are in magnetic circuit design and winding technology. The level of technical barriers determines the speed of domestic substitution. We believe that the speed of domestic substitution from fast to slow is: frameless torque motors/hollow cup motors, harmonic drive reducers, visual sensors, planetary roller screws, and force/touch sensors. By 2024, components with domestic substitution capabilities, including motors and harmonic drive reducers, need to focus on the progress of industrialization. Components still in the process of technological research and development for import substitution, including planetary ball screws and force/touch sensors, need to pay close attention to technological progress.

VI. New Materials: Focus on Carbon Fiber, High-Polymer Plastics, and 3D Printing Technology

We believe that the single machine value of carbon fiber and PEEK materials in humanoid robots is relatively small. Due to being a new field, they have also attracted market attention. We believe that the main directions for lightweight technology development are fourfold: 1) New materials: carbon fiber, PTFE, magnesium alloy, PEEK, etc. The specific choice of material should consider the stress state of the part and material processing performance. For example, carbon fiber plates are suitable for frame materials, and force-bearing special-shaped parts can use aluminum alloy or magnesium alloy, while non-force-bearing special-shaped parts can use resin or nylon. Secondly, cost should be considered, as the cost of carbon fiber and PEEK is much higher than other materials currently. 2) Topological optimization: adopting 3D printing technology. 3) Cable harnesses.

VII. Equipment: The Import Substitution of Key Processing Equipment such as High-Precision Grinding Machines is Expected to Accelerate

In the processing of harmonic drive reducers, heat treatment and precision machining determine the gear accuracy of the reducer, and there are opportunities for import substitution in key equipment such as heat treatment, gear grinding machines, and coordinate measuring machines. In the processing of planetary roller screws, the main links determining processing accuracy are straightening, heat treatment, and precision grinding. There are opportunities for import substitution in key equipment such as heat treatment, μ-grade grinding machines, and cyclone milling machines with a grade above C5.Eight, Algorithm: The entry of FDS into China will accelerate the process of robot AIization.

Tesla's humanoid robots share the FSD system with its vehicles, which is composed of data, algorithms, and hardware to form an overall architecture. Its iterative path is to support continuously upgrading algorithms by continuously upgrading the computing power of hardware, to process the ever-increasing massive amount of data. The humanoid robot of Tesla and the underlying module of FSD are connected, to a certain extent, the algorithms can be reused. Tesla's "interactive search" planning model further enhances the control ability of the FSD system, and the FSD system can also model the visible area through the Occupancy Network, dealing with unknown and invisible scenarios. According to the announcement of Tesla AI's Twitter account, by 2024, the computing power of Tesla DOJO will enter the top 5 in the world, close to the total computing power of 100,000 Nvidia A100 graphics cards. Deutsche Welle reported that FSD is expected to enter China in 2024, and the owner's manual on the Chinese official website has been updated with relevant introductions and usage specifications of FSD Beta. Undoubtedly, the entry of FSD into China will accelerate the process of robot AIization.

Nine, Body Manufacturer: AI Robot Body Manufacturers with Full-stack Self-developed Software and Hardware have a greater chance of winning.

We believe that robots, like the automotive and mobile phone industries, will be a winner-takes-all and head-gathered competitive pattern in the future stable state. AI robot body manufacturers with full-stack self-developed software and hardware have a greater chance of winning, and companies that focus on carefully polishing products and accumulating advantages should be paid attention to. Large manufacturers with underlying operating systems can have a higher chance of winning by acquiring or forming their own body teams, and enterprises with the ability to integrate innovation throughout the entire chain.