The Current Status and Development Trends of Industrial Automation in China As is well known, China is becoming the world's factory. It ranks first in the world in the production of nearly 100 commodities, spanning more than 10 industrial sectors, such as consumer goods, pharmaceuticals, and electronic components. In 2003 alone, China attracted over US$50 billion in overseas investment. In recent years, its annual economic growth rate has remained between 7% and 8%. Manufacturing has become China's largest industrial sector; however, the output value from equipment manufacturing accounts for only 26% of the total manufacturing output. Compared to the over 40% proportion in the United States and Germany, China's manufacturing industry needs to develop rapidly over the next 20 years. This will bring unprecedented opportunities for factory automation. Capital-intensive and technology-intensive industries are increasingly receiving government support; on the other hand, given China's potentially huge market and abundant, inexpensive human resources, many developed countries are transferring their production lines and equipment to mainland China to set up factories. Therefore, for a considerable period in the future, developing labor-intensive industries will remain an important policy of the Chinese government. All these factors directly influence the landscape of industrial automation in China. For example, in the modern factories of Volkswagen in Changchun and Shanghai, and Nokia's Beijing factory, state-of-the-art industrial production lines and testing equipment are ubiquitous. Their levels of automation and quality control are comparable to, or even surpass, those of their production bases in other countries. You can also see many semi-automated, semi-manual production lines, where automated testing equipment is only added to key stages. In many cases, this arrangement actually leads to higher efficiency and lower costs. This unbalanced development pattern, unique to China, has consistently impacted the development of industrial vision. Before 1990, machine vision in China had a brief history , with only a few laboratories in universities and research institutes researching image processing and pattern recognition. In the early 1990s, some engineers from these research institutions founded their own vision companies, developing the first generation of image processing products, such as grayscale image acquisition cards based on the ISA bus and some simple image processing software libraries. Their products were applied in university laboratories and some industrial settings, enabling people to perform basic image processing and analysis. Although these companies successfully solved some practical problems with vision technology, such as multimedia processing, printed surface inspection, and license plate recognition, the insufficient functionality and reliability of their products' hardware and software limited their development potential in industrial applications. Daheng Imaging Technology Co., Ltd. is one of the better performers. Another important factor was the limited market demand; many engineers in industry lacked a concept of machine vision, and many companies did not recognize the importance of quality control. This situation persisted until 1998. Therefore, we refer to the period from 1990 to 1998 as the initial stage. During this period, the actual market sales of machine vision systems were negligible. Major international machine vision manufacturers had not yet entered the Chinese market. Since 1998, an increasing number of electronics and semiconductor factories, including those invested in by Hong Kong and Taiwan, have settled in Guangdong and Shanghai. Complete production lines and advanced equipment with machine vision were introduced to China. With this trend, some manufacturers began to develop their own vision inspection equipment, marking the beginning of real market demand for machine vision. Equipment manufacturers and OEMs needed more external technical development support and product selection guidance. Some automation companies seized this opportunity, such as Beijing Hollysys Motor Technology Co., Ltd. (formerly Beijing Sitong Motor Co., Ltd., mainly engaged in motion control). They took a different development path from the image companies mentioned above—becoming agents and system integrators for international machine vision suppliers. They introduced the most advanced mature products from the United States and Japan, provided professional training and consulting services to end users, and sometimes developed complete sets of vision inspection equipment with their business partners. After long-term market development and cultivation, not only in the semiconductor and electronics industries, but also in the automotive, food, beverage, and packaging industries, some top manufacturers began to recognize the important role of machine vision in improving product quality. Here, we define 1998-2002 as the introduction period of the machine vision concept. During this stage, many well-known vision equipment suppliers, such as Matsushita, Omron, Cognex, DVT, CCS, DataTranslation, Matrix, and Coreco, began to contact the Chinese market to seek local partners, but qualified local partners were few and far between. For example, Beijing Hollysys Electric Technology Co., Ltd. was once selected as a major agent or solution provider by five foreign companies. The third stage, from 2002 to the present, is what we call the machine vision development period. We can see the rapid growth trend of machine vision in China from the following points: 1. In various industries, more and more customers are seeking visual inspection solutions. Machine vision can solve precise measurement problems and better improve their product quality. Some customers have even established their own vision departments. 2. More and more local companies are beginning to introduce machine vision into their businesses. Some are general industrial control product agents, some are automation system integrators, and some are new vision companies. Although most of them have not yet achieved full returns, they all agree that the machine vision market has great potential. The lack of senior vision engineers and practical project experience is their main problem. 3. Some companies with several years of practical experience (such as Daheng and Hollysys Electric) are gradually positioning themselves to better develop their machine vision business. They either continue to improve their acquisition card and image software development capabilities, or try to become leading manufacturers providing industrial field solutions or visual inspection equipment. Simple agency remains part of their business, but they have begun to develop their own technologies or know-how at the component and system levels. 4. After several years of searching for agents, many multinational corporations began establishing their own branches in China. They typically set up branches in Beijing or Shanghai to manage key clients and provide technical and business support to partners. Major Manufacturers in China's Machine Vision Field After nearly 10 years of development, there are still several dozen active companies and research institutions in China's machine vision field, along with approximately 10 multinational corporations operating domestically. Some of the companies listed are as follows: Major Domestic Companies: 1. Beijing Hollysys Motor Technology Co., Ltd. (Motion control motors, controllers, and machine vision systems) 2. Beijing Daheng Image Vision Co., Ltd. (Image processing, vision product development and distribution) 3. Beijing Microvision Co., Ltd. (Vision product distribution) 4. Kerui Automation (Shenzhen) (Electronics and semiconductor equipment) 5. Dongfang Guanqun Technology (Shanghai) (Supporting the electronics and semiconductor industry, light sources) 6. Stepper Electromechanical (Shenzhen) (Motion control, vision product distribution) 7. Second2None Machine Vision Systems Co., Ltd. (Acquisition cards and image software development) 8. Xi'an Zhixin Control System Integration Co., Ltd. (Pharmaceutical testing equipment) Multinational Companies : 1. Cognex (Modules and board systems, with a representative office in Shanghai for distribution) 2. DVT (Modular vision systems, with a representative office in Shanghai for distribution) 3. Matrox (Board vision processing systems, sold through distributors) 4. Coreco (Board vision processing systems, sold through distributors) 5. Matsushita Electric Industrial (Modular vision systems, with branches in Beijing, Shanghai, Guangzhou, and Shenzhen, sold through distributors) 6. Omron (Modular vision systems, with branches and distributors in major cities) 7. Keyence (Modular vision sensors, sold directly by its own Chinese branch) 8. PPT Vision (Line scan vision systems, sold through distributors) 9. National Instruments (NI) (Vision systems based on computer virtual instrument technology, with branches in Beijing, Shanghai, Shenzhen, and Xi'an, sold through distributors) 10. DT (Image acquisition cards and software packages, sold through distributors) 11. CCS (Light source equipment, with a branch in Shanghai) Main application scope, market size, business opportunities, and challenges Machine vision is applied in industries such as semiconductors, electronics, computer components, consumer goods, food, automotive, metallurgy, packaging, and pharmaceuticals. It is mainly used for product size measurement, surface inspection, positioning and navigation, OCR/OCV, and color recognition. These industrial applications are basically the same as in other countries. However, it must be pointed out that while China has a complete and complex industrial system, and every industry may use machine vision, it's unrealistic to expect every large manufacturer to install vision systems. This is because human resources are abundant and inexpensive in China, and some manufacturers prefer to use manual labor for better results. A few years ago, the Chinese machine vision market was virtually nonexistent, with most distributors selling only a few systems annually. In 2000, the total number of installed vision systems did not exceed 100. Although precise market survey data is unavailable, we can roughly estimate that the total number of installed vision systems exceeded 500 in 2003, including modular and board-based systems, with direct sales of approximately $2.5 million. The number of vision systems installed with imported equipment is not included in this calculation. Even from the perspective of a medium-sized enterprise, this market size is too small, but we cannot ignore its enormous market potential. Leading companies like Cognex and Matsushita have done a great deal of work in market development. Large, diversified industrial control companies like Siemens, Omron, and Matsushita have over 10 years of business experience in China. Compared to pure vision companies (such as Cognex and DVT), they are more familiar with the Chinese business and social environment, have established their own sales networks, and possess abundant customer resources. However, specialized companies can also gain a competitive advantage by relying on their strong product lines and professional services. Opportunities always come with difficulties and risks. The machine vision market is still in its infancy and requires patient cultivation. In many situations, people don't follow the rules of the game; they prefer to rely on personal connections. Many customers show great interest in vision products, but ultimately few can afford the costs. Therefore, in economically developed regions such as Beijing, Shanghai, and Guangdong, doing business with foreign companies seems like a good path. Another factor is the price barrier; the high prices make it unaffordable for many customers, although they should comprehensively evaluate the return on investment in terms of improved product quality and labor savings. Finally, perhaps the most difficult factor is that a complete industry value chain, consisting of original suppliers, qualified agents, experienced integrators, sufficient application engineers, and other roles, is far from being formed. Summary In summary, the Chinese machine vision market is in a period of rapid development. In the near future, we can expect to see diverse business models and companies from various sectors. As the market grows, some domestic engineering companies and system integrators will become market leaders, with more customers relying on their comprehensive capabilities in vision and other automation technologies, such as motion control and network communication, to solve problems. Behind them are powerful multinational corporations that will control major original equipment manufacturers (OEMs) and VIP end-users. We should also note the trend of multinational corporations localizing their product manufacturing, assembly, service, technical support, and financial policies. Furthermore, more domestic companies will develop vision products with independent intellectual property rights, either independently or in collaboration with foreign companies. We hope that one day, Chinese engineers will be able to choose their preferred vision components and quickly build their own systems at reasonable prices, just as they choose industrial products like PLCs today.