Robots are programmable machines that are oftentimes used to do a single task. These robots aren’t allrounders, but they’re very good at doing something specific, such as welding two pieces of metal together, or sorting goods that are moved on a conveyor belt.

These tasks can be done by humans as well, and they were done by humans in the past, prior to the rise of robots. In some companies, some or all of these tasks are still being done by humans, but more and more robots are used to do these tasks due to several reasons:

• Robots can be cheaper, especially when it comes to production plants in high-cost countries where employees earn high wages.
• Robots can do their tasks 24 hours a day, 7 days a week. They don’t get ill and don’t go on vacation.
• Some tasks are dangerous or unhealthy – when robots are used to tackle these tasks, no human is in danger.
• When there’s a labor shortage, using robots for easy and repetitive tasks can free up human time and allows companies to use their employees on more complex and productive tasks.

Due to these factors, manufacturing companies are seeking to expand their use of robots substantially going forward.

McKinsey reports that across the industrial world, many companies plan to spend at least 25% of their overall capital expenditures on automation. Also, according to McKinsey’s study, respondents’ goals include higher efficiency, higher uptime, and improved quality.

In the above chart, we see that overall robot installations have been growing for years. Especially collaborative robots, or cobots, are seeing massive growth, with installations rising by 400% between 2017 and 2022. These cobots are used together with humans and “help” them do a specific task:

It can be expected that cobots will continue to gain popularity, as they help humans in doing complicated tasks more efficiently and more safely.

The Benefit from Manufacturing Robot Usage with Your Investments

Robots are being used in many different industries, from food and retail to logistics. When it comes to manufacturing, some of the companies that employ robots to the largest extent are automobile manufacturers.

Automobile companies oftentimes pay high wages, thus using robots to lower labor expenses is attractive. Certain tasks, such as welding, are comparatively easy to automate and can be dangerous for humans, making automation a compelling decision. Ford (NYSE: F), General Motors (NYSE: GM), Honda (NYSE: HMC), Tesla (NASDAQ: TSLA) and Toyota (NYSE: TM) – famous for its operating efficiency – are some of the automobile companies using robots in manufacturing processes.

South Korea has one of the highest robot densities, meaning major South Korean companies, such as Samsung, LG or Hyundai, are also finding ways to benefit from the manufacturing robotics MegaTrend.

Companies that build and sell robots themselves are also a possible investment idea for those that want robotics exposure. This includes ABB Ltd, Mitsubishi, Kawasaki, and similar industrial companies.