Korea has world-class capabilities in robot utilization, but an analysis found its supply chain is vulnerable due to high dependence on overseas sources for core materials and parts.
The Korea International Trade Association Institute for International Trade and Commerce released a report on Jan. 25 titled "Changes in the global robotics industry landscape and a comparison of Korea-Japan supply chains, with implications," noting this point.
According to the report, Korea ranks fourth in the world in the number of industrial robots installed and first in robot density, placing it at the top globally in terms of robot utilization.
However, it is weak in terms of global competitiveness and supply chains. First, 71.2% of total shipments in Korea's robot market were concentrated in domestic demand. In contrast, Japan, which ranks second in the world in industrial robot installations, exports more than 70% of its shipments.
The key reason for the gap between Korea and Japan lies in differences across the supply chain spanning upstream (raw materials and materials), midstream (core parts and modules), and downstream (finished goods and SI). Korea relies on China for 88.8% of permanent magnets, a core robot material. It also mainly imports core parts such as precision reducers and controllers from Japan and China.
With the localization rate of materials and parts stuck in the 40% range, the more robots Korea makes, the more imports of foreign materials and parts increase in tandem.
Japan, by contrast, has recycling technology that recovers rare earths from used motors and corporations that hold a 60%–70% global market share in core parts such as reducers and motors. In the midstream, global corporations including Harmonic Drive (reducers) and Yaskawa (motors) also command 60%–70% of the world core parts market, building a stable "vertically integrated" supply chain.
The report proposed a two-track strategy that pursues both supply chain stabilization and leadership in new markets for the continued growth of Korea's Robotics industry. The report emphasized that corporations should strengthen joint research and development (R&D) between demand and supply corporations to localize core materials and parts, expand exports of package-type offerings that combine robots, SI, and after-sales service, and pursue client robot marketing based on security and reliability. At the government level, it suggested policy support such as sharing localization risks, creating public-sector demand, and advancing the recycling system.