A Company That Has Dug the Same Well for 33 Years Is Moving the Robot Market

While reading robot-related articles, I discovered a truly fascinating company. It’s a company called SPG, which has been developing precision reducers for 33 years. I actually didn’t know much about what precision reducers were, but it turns out they’re one of the core components of robots.

What struck me about this company’s story is that it’s not just a simple tech development success story, but seems to simultaneously show both the reality and potential of Korea’s manufacturing industry, so I wanted to organize my thoughts about it.

What Makes Precision Reducers So Important?

From what I read in the article, precision reducers are core components that serve as joints for robots. They’re devices that convert the fast rotation of motors into slow, precise movements, and without them, robots can’t perform delicate operations.

What surprised me most personally was that this market is dominated by Japanese companies. Japanese firms like Harmonic Drive and Nabtesco apparently hold over 70% of the global market share. Particularly, Harmonic Drive has maintained its monopolistic position since gaining a foothold in this field in the 1980s – that’s truly formidable technological prowess.

The Meaning of 33 Years on a Single Path

Since SPG started developing precision reducers in 1991, they’ve really been digging the same well all along. According to the article, initially they struggled because the technological barriers set by Japanese companies were too high.

What impressed me was that they didn’t give up and steadily devoted themselves to technological development. Particularly when the robot market began to grow in earnest in the 2010s, they succeeded in entering the market based on the technological capabilities they had accumulated over the years.

Actually, success stories of B2B component companies like this aren’t well known to the general public. But I think having companies like this is what makes Korea’s manufacturing ecosystem solid.

What’s the Current Market Situation?

According to the article, the global precision reducer market size is about $2 billion as of 2023. And with the growth of the robot market, annual growth of 7-8% is expected.

But the wall built by Japanese companies still seems high. Particularly in the industrial robot sector, Harmonic Drive’s market share is still overwhelming. However, in new fields like collaborative robots or service robots, Korean companies seem to have opportunities.

In SPG’s case, they’re currently collaborating with domestic robot companies and gradually increasing their market share. As companies like Hyundai Robotics and Doosan Robotics grow, demand for domestic components seems to be increasing as well.

Chinese Companies’ Pursuit Is No Joke Either

However, the pursuit by Chinese companies also seems to be something to watch out for. While the article didn’t mention it specifically, China is making significant investments in localizing core components as they foster the robot industry as a national strategic industry.

In terms of price competitiveness, China might have the advantage, but in technical aspects like precision and durability, Korea and Japan still seem to be ahead. Ultimately, it seems we need to continue differentiation through technological innovation.

Future Prospects

Personally, I think we need more companies like SPG. As the robot market grows in earnest and demand for core components surges, reducing overseas dependency and increasing the domestic production rate will be important.

Especially with supply chain risks becoming a hot topic recently, many companies are pushing for diversification of component suppliers. In this situation, it could be an opportunity for domestic companies with technological capabilities.

However, global recognition and brand power still seem insufficient. Technology alone has its limits, and more investment in marketing and building global networks will be necessary.

I think the craftsmanship spirit of focusing on one field for 33 years is truly remarkable. Don’t you think having companies like this is what will make Korea a true technology powerhouse?

As the robot market continues to grow and the precision reducer market expands along with it, it will be interesting to watch how SPG survives in global competition. Above all, I hope more of these hidden champions become known and showcase the underlying strength of Korea’s manufacturing industry.

This article was written after reading the news article [Going to the Corporate Front Lines – SPG] 33 Years on the Single Path of ‘Precision Reducer’ Development, with added personal opinions and analysis.

Disclaimer: This blog is not a news outlet, and the content written represents the author’s personal views. Investment decisions are the responsibility of the investor, and we assume no responsibility for investment losses based on the content of this article.