[Real Asset Strategies] Robot Stocks Driven by AI and Labor Shifts: Where to Focus and Select

South Korea Ranks as the World’s Fourth-Largest Robotics Market
Policies and Labor Environment Drive Demand
"Prioritize Companies Delivering Results and Specialized Sectors"
"Collaborative and Industrial Robots Lagging... Potential for Rebound Next Year"

This year, the convergence of the artificial intelligence (AI) boom and changes in the labor environment has propelled the robotics industry to become a major investment destination in the stock market. This is based on the assessment that 'automation of labor' is accelerating across manufacturing, logistics, and services, moving beyond a simple theme. According to the International Federation of Robotics (IFR), the global robotics market is projected to grow from $25 billion (about 35 trillion won) in 2020 to $160 billion (about 222 trillion won) by 2030. This represents a steep annual growth rate of nearly 20%.

Structural Demand in Manufacturing Powerhouses Drives Competitiveness

The securities industry has identified the competitiveness of South Korea's robotics sector in its unique status as a 'manufacturing powerhouse.' Industries such as semiconductors, shipbuilding, and automobiles, which require large-scale labor and highly complex tasks, have developed, leading to structural demand for robots. Choi Seunghwan, a researcher at Shinhan Investment Corp., emphasized, "As labor shortages and rising labor costs intensify, expanding investment in robotics is inevitable." He added, "South Korea accounts for 6% of global robot installations and 4.4% of collaborative robots, making it the world’s fourth-largest industrial robot market. Approximately 1,012 units are installed per 10,000 manufacturing workers, the highest penetration rate in the world."

Expansion of government budgets related to robotics is also driving market growth. The budget for the spread of AI across industries has been increased nearly threefold from 456.1 billion won this year to 1.1347 trillion won next year. The budget for the AI Factory Leading Project has been raised from 158.2 billion won to 220 billion won, and the budget for developing physical AI, which combines the physical functions of robots with AI, has increased from 214.9 billion won to 402.2 billion won.

Changes in labor and management environments are also stimulating demand for robots. On August 24, the Yellow Envelope Law (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act) passed the National Assembly, and the following day, the stock prices of major robotics companies rose by an average of 10%. Oh Junho, a researcher at Stunning Value Research, stated, "With the passage of the Yellow Envelope Law and similar measures, labor risks are increasing for companies," adding, "To avoid these risks, demand for industrial robots and automation facilities is expected to rise."

The 'Actuator' is the Heart of Robots... "Comparable to the Importance of Nvidia GPUs in AI"

The robotics sector can be divided into key areas such as actuators, humanoids, collaborative robots, traditional industrial robots, and logistics automation.

First, actuators are joint components combining motors, reducers, and controllers, accounting for 60-70% of a robot's cost. The importance of actuator companies in the robotics industry can be understood by comparing it to Nvidia’s position in the generative AI sector, where graphics processing units (GPUs) are the core component, making it the world’s most valuable company by market capitalization. Park Junyoung, a researcher at Hyundai Motor Securities, said, "It has not yet been determined who will dominate the humanoid market," emphasizing, "The companies that will benefit from this competition are undoubtedly those producing actuators, the common component."

For example, Robotis is a company that has been manufacturing actuators for over ten years, with customized technological expertise as its strength. Supplying parts to global humanoid manufacturers such as Tesla and Unitree, it recorded shipments of 150,000 units last year. Hyundai Mobis has also officially entered the robotics business, presenting actuators as one of its future growth engines. Lee Jaeil, a researcher at Eugene Investment & Securities, stated, "They can secure volume from Boston Dynamics, a Hyundai Motor Group subsidiary. The group plans to deploy humanoid robots at the Meta Plant in Georgia, USA, starting next month, and to build a robot factory in the US with an annual capacity of 30,000 units, aiming for mass production from 2028."

"Only a Few Companies Are Delivering Results... Selection and Focus Are Needed"

The humanoid sector is considered to be in its inaugural year of market emergence. The industry expects the global humanoid market to exceed 55 trillion won by 2035. While global big tech companies are racing to launch new products, domestically, Samsung Electronics subsidiary Rainbow Robotics is the leading player. It plans to unveil a new humanoid product in the second half of this year and will operate a dedicated production line at its Sejong plant starting next year.

Logistics automation is also considered a promising field. In particular, Hyundai Movex is continuing its external growth by supplying logistics automation equipment and software. Jung Yeonseung, a researcher at NH Investment & Securities, analyzed, "The global logistics automation market is growing at an annual rate of 10-15%, but Hyundai Movex is growing even faster," attributing this to the company's expansion of its order portfolio by executing projects across various industries such as distribution, food and beverage, and tires.

The collaborative robot sector refers to robots that interact with their surroundings through sensors, enabling humans to successfully perform tasks. However, the stock prices of leading players such as Neuromeka and Doosan Robotics have been sluggish this year. This is due to a combination of the economic slowdown in Europe and the burden of high interest rates, which have reduced demand from global clients. Industrial robots perform repetitive movements to carry out tasks such as transport, assembly, painting, and welding. These are typically multi-jointed robotic arms, with companies such as Koh Young (inspection, surgery), Yujin Robot (factory automation), and Now Robotics (home appliances, automobiles) operating in this field.

Experts advise that, for the time being, investors need to carefully distinguish between winners and losers in the robotics sector. Researcher Choi Seunghwan said, "Only a few companies in the robotics sector are currently delivering strong results. Only the humanoid, actuator, and logistics automation fields have shown sales growth, while collaborative and industrial robots have seen a sharp decline in sales. For now, differentiation is inevitable, and selection and focus are necessary."

He added, "Investors should focus on companies in the value chain that supply parts for humanoids and intelligent robots, companies that have received equity investment from large corporations, and those that have achieved results in specialized areas such as logistics. For collaborative and industrial robot companies, it is worth monitoring the possibility of a rebound after the second half of next year, when ROI (return on investment) is expected to improve."