Tariffs have made American companies realize that they still rely heavily on Chinese factories.
Now, as more and more Chinese factories introduce cutting-edge technologies such as artificial intelligence and robots to reduce costs and improve quality control, it will be more difficult for American companies to refuse to purchase from China. Last weekend, venture capitalist Mary Mick highlighted the potential of artificial intelligence in reshaping manufacturing in her tech trend report that has attracted much attention since 2019.
Oshri Cohen, CEO of startup Cybord, said Chinese companies are eager to adopt new technologies and believe that artificial intelligence-driven quality control tools will gain a large number of customers this year.
Cybord does not use generative artificial intelligence, but uses supervised machine learning to identify defects based on models in its manufacturing components database, Cohen said. These defects include counterfeiting, remnants and tampering with parts. Last month, the startup announced the integration of the system into the factory management system of industrial giant Siemens. Cohen, formerly vice president of Nvidia's supply chain, expects geopolitical pressures to diversify supply chains, thus making Chinese factories more competitive. He said, "the factory will return to China", but unlike the past decade, China will "become synonymous with high quality."
Stanford University quoted a report from the International Federation of Robots that China's industrial robot installations in 2023 will reach nearly seven times that of the United States, accounting for more than half of the global industrial robot installations. Despite this, the level of automation is not balanced, and industries such as automobiles have low demand for labor, while production lines such as clothing still rely heavily on manual operation of machines.
The Chinese government has formulated a grand plan to further promote the digitalization of factories across the country in the next five years. Last month, China released the "Special Action Plan to Accelerate the Development of Digital and Intelligent Supply Chain", proposing to apply artificial intelligence and blockchain technologies in the manufacturing and agriculture fields by 2030, and cultivate about 100 leading digital supply chain companies.
China already has the first-mover advantage.
McKarel Ilutt, senior partner at McKinsey in Shenzhen, said: "Chinese companies are an important global force in the digital transformation of manufacturing and the application of automated digital analytics." He pointed out that since the World Economic Forum and McKinsey began tracking the process of factory digitalization in 2018, the number of typical application cases has risen to 189, of which about 43% are from China, covering multiple industries. These cases include Chinese home appliance manufacturer Midea, as well as the business units of General Electric Medical, AstraZeneca and Schneider Electric in China. The report mentioned that some companies (such as Qingdao Hisense Hitachi Joint Venture) are using generative artificial intelligence to reduce the time of inefficient meetings and directly direct the focus of workers' work in the next shift to problems that need to be solved.
Ilut said that companies are seeking ways to improve productivity from the supply chain to consumers, and in terms of the integration of artificial intelligence and manufacturing, the gap between "pioneers" and "laggards" is continuing to widen. He said: "The Chinese market is very competitive. The competition among enterprises is quite cruel."
In recent weeks, with the arrival of a new wave of electric vehicle price cuts, the cruelty of this competition has emerged again. BYD disclosed in its 2024 annual report that the company has started the deployment of autonomous mobile logistics robots in the manufacturing process. The company has also made strategic investments in several robotics companies.
Jens Escron, president of the European Chamber of Commerce of China, told reporters in Beijing last week: "From a cost perspective, the supply chain has achieved a balance between extremely high efficiency and strong competitiveness... If you want to participate in the competition, you must base yourself in the Chinese market."
Other automobile companies, such as NIO and Geely, have also focused on the application of artificial intelligence as their development focus.
Zhou Zipeng, executive general manager of CICC Research Institute, said that the application of artificial intelligence may even promote the restructuring of the automotive industry. He pointed out that despite the challenges in data collection and storage, artificial intelligence has been applied in lithium battery material development and chip manufacturing in China.
Hou Xuchao, founding partner of Zhuoshi Investment Consulting, said that although the application of generative artificial intelligence is still in its early stages, it can quickly generate massive design solutions, greatly shortening the product's cycle from R&D to market. He also said that generative artificial intelligence can also improve equipment maintenance efficiency and help companies accelerate the absorption of professional technical knowledge. "Looking forward next year, the integration of artificial intelligence and manufacturing is expected to further accelerate." He emphasized that the organic combination of data, algorithms and application scenarios is becoming a new barrier to access for corporate competition.
Source: Reference News Network
Author: Zheng Yilun, compiled by Li Sha
Editor: Hu Liang
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