[Into the Stocks] SBV Tech's Stock Jumps 3x on Localization of Robot Parts

Entering Full Growth Phase by Replacing Japanese Products
40% Cheaper and Shorter Lead Time Compared to Competitors

[Asia Economy Reporter Hyungsoo Park] The stock price of SBV Tech, a manufacturer of harmonic reducers that serve as the "joints of robots," has sharply risen this year. This is a result of growing expectations for growth as Samsung Electronics has begun to actively pursue its robot business. SBV Tech succeeded in mass-producing harmonic reducers, which were previously dependent on Japanese products due to their complex manufacturing and design, using its own technology.

According to the Korea Exchange, SBV Tech's stock price rose more than 211%, from 17,200 KRW at the end of last year to 56,100 KRW on the 24th. During the same period, the KOSDAQ index increased by about 15%.

SBV Tech is a manufacturer of reducers for robots. A reducer is a component that amplifies the rotational force of a motor in robots and automated devices to precisely control the robot. Japanese companies hold 90% of the market. Among various robot components, reducers account for about 30-40% of the cost. Harmonic reducers are increasingly applied in fields such as medical robots, service robots, transport robots, and defense. Producing harmonic reducers requires precise technologies such as ultra-thin bearing parts with elasticity, micro-sized gear shaping technology, and wear-resistant heat treatment technology.

Hana Securities recently analyzed that SBV Tech's harmonic reducers have improved in quality enough to replace Japanese products. The precision requirement for harmonic reducers proposed by Japan's H company, the market leader in robot reducers, is an angular transmission error of 60 arcseconds (arcsec; 1 arcsecond is 1/3600 of a degree). SBV Tech's angular transmission error is 20.8 arcseconds, exceeding the standard.

Choi Jae-ho, a researcher at Hana Securities, explained, "Last month, SBV Tech completed expansion investments to meet the increasing demand for reducers," adding, "The production capacity of reducers has been expanded from 12,000 units to 52,000 units." He continued, "It is the largest among domestic manufacturers of precision reducers for robots," and "We expect its market share in the domestic reducer market to increase."

SBV Tech is reportedly in discussions with major domestic collaborative robot companies regarding testing and mass production of precision reducers. Not only domestic companies but also in China, tests are underway to replace reducers used in flat panel display (FPD) transport robots with SBV Tech products. Since Japanese companies have virtually monopolized the market and the robot market is rapidly growing, the supply of harmonic reducers cannot keep up with demand. Beyond price, dissatisfaction with delivery delays has increased, leading to growing demand for SBV Tech products.

SBV Tech's products are more than 40% cheaper than competitors' and have shorter lead times for supply after orders. After long-term development investment, the company has secured technology capable of replacing competitors' products. Hwang Seong-hwan, a researcher at Shinhan Financial Investment, analyzed, "SBV Tech plans to expand production capacity to 200,000 units by 2025," and "Results will begin to appear in earnest starting this year."