Bernstein sees US-China robotics decoupling after FCC ban

Bernstein foresees formal U.S.-China decoupling in the robotics sector following a recent ban by the Federal Communications Commission (FCC) on new foreign-made mobile robots. The FCC's direct restriction on Chinese robot models, including humanoid and quadruped types, contrasts with previous restrictions in sectors such as automobiles, telecommunications, and drones.

The firm anticipates that the U.S. may extend its measures beyond market-access restrictions to encompass Entity List designations and investment limitations, akin to actions taken against Huawei, Hikvision, and DJI. China's robotics industry presently depends on U.S. AI chips and simulation platforms, rendering these areas susceptible to potential future U.S. policy actions.

China's robotics sector may respond by implementing lifecycle data controls, potentially drawing from a framework similar to the automotive industry. Galbot, a Chinese robotics firm, aims to augment its high-quality data volume by tenfold within the next two years.

Rare-earth magnets may emerge as China's most potent policy tool, as the country controls the entire value chain for these crucial components in modern humanoid robots. Several entities may reap benefits from the decoupling. In the U.S., local humanoid manufacturers like Tesla, Figure, and Agility could thrive under policy barriers.

Chinese humanoid manufacturers may intensify their expansion in non-U.S. markets. Chinese component suppliers with overseas facilities, such as Shuanghuan, Tuopu, Hesai, and Orbbec, may flourish in both Chinese and U.S. robotics markets.

Non-Chinese component suppliers, including Schaeffler and Harmonic Drive, might capitalize on U.S. humanoid customers seeking to diversify their supply chains. Horizon Robotics and Black Sesame, both focusing on chips for robotics using their expertise in smart driving chips, may benefit if technology restrictions intensify.