Vision perception, as the most essential human sensory capability, assists humans in acquiring 70% of daily information. The process of machine vision technology - "gathering information - transmitting information - processing information" - resembles the functioning of the human eye, making it an extension of human vision in the industrial sector.
Over the past few decades, 2D imaging technology in machine vision has gradually developed and become widespread. Various electronic devices can recognize, assess, and track their surrounding environments using flat images captured by 2D cameras. With further technological advancements, 2D imaging technology has started to fall short in meeting the real-world requirements of the three-dimensional environment, and the emergence of 3D vision technology effectively addresses this issue.
3D vision technology not only provides the functionality of 2D imaging but also caters to the needs of automated equipment for 3D information, such as object shape, depth, and position within images, thereby enabling more complex production tasks. Additionally, 3D vision technology finds extensive applications in various domains, including 3C electronics, commercial robotics, VR/AR, automotive, lithium-ion batteries, and more.
An Overview of the Global Development of 3D Vision Technology
The Development of 3D Vision Technology has its Significance in Industrial Automation.In 2022, the global industrial automation market reached an approximate value of CNY 457.5 billion, with China contributing a substantial CNY 282 billion, both showing steady growth. Worldwide, the aging population in developed countries and the increasing labor costs have accelerated the shift towards automated equipment replacing manual labor in production. Additionally, post-pandemic, factories are swiftly transitioning to intelligent production models, making automation equipment an indispensable component in industrial manufacturing.
In the same year, the global 3D vision market achieved USD 5.81 billion, with China's market size reaching CNY 18.4 billion, marking a 59.90% year-on-year growth. According to YoleDevelopment's projections, the global 3D vision market is expected to reach USD 15 billion by 2025, with an average annual growth rate of about 20%.
In the 3D vision sector, companies from Europe, the United States, and Japan lead the upstream industry. Corporations like Keyence in Japan, Cognex in the United States, Basler in Switzerland, and Datalogic in Italy possess substantial technical expertise and widespread sales channels for products such as 3D vision sensors and 3D laser cameras. In 2022, Keyence held approximately 55% of the global market share, with a share of about 38% in China, while Cognex held about 9% globally, with a 7% share in China.
Presently, Chinese 3D vision manufacturers are predominantly small and medium-sized enterprises, offering significant room for growth when compared to global industry leaders. These manufacturers are gradually expanding into the global market due to breakthroughs in research and development and cost advantages. Leading companies in this field include Luster（凌云光）, Opt Machine Vision（奥普特）,iRayple（华睿科技）, SenseTime（商汤科技）,Mech-Mind（梅卡曼德）,LINX ROBOT（灵西机器人）,Percipio.XYZ（图漾科技）, and TransferTech（迁移科技）.
Approximately 80% of the costs of machine vision systems come from upstream core components and software systems. With their localized service capabilities and strong non-standard customization abilities, Chinese manufacturers have achieved a high degree of domestic production in the fields of lighting and industrial cameras, giving them a competitive edge in competition with American and Japanese companies. For example, the leading domestic company, Luster, has captured a market share of 22.4% in the consumer electronics sector, ranking third domestically, following only Cognex and Keyence. However, in comparison to the world's top machine vision manufacturers, Chinese companies still need to work hard to catch up in the software systems that require long-term data resource accumulation.
It's worth mentioning that current Chinese 3D vision companies place a high emphasis on the research and development of AI algorithms. According to research data from the China Machine Vision Industry Alliance in 2021, the proportion of R&D in the "AI-driven solutions" direction is the highest in the industry, reaching 21.8%. Taking Luster's in-house developed Visionware as an example, its recognition algorithm performance can achieve a 99% recognition rate in 50ms/5 million pixels. Although there is still some gap compared to Cognex, the algorithm's recognition rate is now essentially on par.
In the future, with Chinese companies focusing on AI algorithms, the 3D vision industry is expected to experience significant growth in emerging industries such as new energy vehicles, lithium batteries, and photovoltaics. This may lead to a further reduction in the technological and application gap with overseas machine vision giants and possibly even overtaking them on the curve.
Domestication Achieves Some Results, Core Components Still Await Breakthrough
The Chinese 3D Vision Industry: Beginning in 2012 and Experiencing Explosive Growth in 2017. With the introduction of Apple's Face ID structured light lens in 2017, domestic mobile phone manufacturers quickly followed suit, joining the 'lens' competition. The surging demand from downstream mobile phone manufacturers for 3D vision components pushed upstream companies to increase research and development investments, promoting the initial development of the domestic 3D vision industry. Currently, there are more than 400 domestic 3D vision companies covering the entire industry chain, including upstream, midstream, and downstream sectors.
The Core Value of 3D Vision is Concentrated in the Upstream of the Industry Chain, Including Upstream Components and Software, Accounting for 80% of the Value, and Having the Highest Technological Barriers. According to data from the HighTech Institute of Robotics, the domestication rate of core components in machine vision has now exceeded 70%. Among them, the domestication rate of industrial cameras and lighting components is as high as 90%. Companies like OPT Machine Vision, CST Machine Vision（康视达）, Wordop（沃德普）,HIKROBOT（海康机器人）, iRayple, Daheng Imaging（大恒图像）, and others have established a presence in this field.
However, when it comes to holding core technology, there are still differences between Chinese manufacturers and leading international brands. High-end, core components such as industrial lenses and software mostly come from foreign giants. The advantage of Chinese companies lies mainly in AI vision algorithms, and many companies have achieved overtaking in related application areas compared to European, American, and Japanese companies.
In 2021, the market had high expectations for 3D vision, leading to a large influx of capital into this industry, resulting in significant expansion in the funding and team sizes of numerous companies. However, the impact of capital quickly exposed the inherent limitations of this industry - the penetration rate of 3D vision is still relatively low, and the influx of too much capital led to premature overcompetition in this relatively small market. Many startup 3D vision companies are facing significant revenue pressure.
In 2022, capital gradually returns to rationality and tends to flow into the head 3D vision manufacturers. At present, China's 3D vision industry is still at an early stage, and increased competition has led to shrinking profit margins, low market concentration, and financing difficulties.
Seeking Survival Space Abroad: Europe, America, Japan, and South Korea Becoming the Main Destinations
In 2017, the 3D vision industry began to reach unprecedented heights as many Chinese companies, facing intense competition and reduced profitability in the domestic market, shifted their focus to overseas expansion. Companies like SenseTime, Mech-Mind, and Rvbust（如本科技） embarked on international ventures.
The COVID-19 pandemic in 2020 exacerbated labor shortages in developed countries, leading to a heightened demand for industrial and commercial robots in Europe, America, Japan, and South Korea. This presented a significant opportunity for Chinese 3D vision companies to expand globally.
In 2021, Rvbust initiated its international expansion by collaborating with the Japanese company RBB to empower the Japanese robot industry. In 2022, iRayple secured orders from North America, South Korea, the Middle East, and other regions, experiencing rapid growth in overseas markets.
Chinese 3D vision companies have several advantages when entering foreign markets, including lower supply chain costs, competitive pricing, and high levels of technical expertise in AI vision algorithms. Thanks to China's vast market size and abundant application scenarios, these companies have gained substantial industry experience domestically. Moreover, their customization capabilities have helped them capture a significant share of overseas markets.
For instance, Dilusense（的卢深视） tailors its 3D vision sensors to the specific needs of different industries, providing more customized solutions based on the industry's characteristics. Their technical approach involves identifying real-world scenarios, analyzing them, and optimizing their solutions to meet various user requirements.
Among the companies venturing into overseas markets, Mech-Mind and Percipio.XYZ stand out. In 2021, Mech-Mind expanded into foreign markets by establishing subsidiaries in Munich, Tokyo, Seoul, and other major cities. By 2022, its overseas revenue had reached 20% of the total revenue. After accumulating rich, replicable application scenarios domestically, Mech-Mind rapidly expanded and implemented large-scale projects in overseas markets.
Since its establishment in 2015, Percipio.XYZ has maintained a strong focus on international markets. Technologically, Percipio.XYZ positions itself as a core component enterprise, possessing essential patented technologies and establishing a competitive edge in its products. Combined with its pricing advantage, Percipio.XYZ encountered fewer difficulties when entering global markets. In terms of distribution, Percipio.XYZ adheres to a localization strategy. It not only relies on conventional sales and market development but also provides localized support for the essential services required by hardware products. From 2020 to 2021, its overseas revenue consistently exceeded 15%, and in 2022, it even surpassed 20%.
Movement deformation: Revenue Pressure Creates Market Distortions
With the 3D vision industry downstream application scenarios continue to develop, the number of entrants continues to increase, the industry began to become more and more Involution. "Involution" is reflected in the price, many manufacturers want to "price" for "scale", and there is a trend of "top-down".
Under the pressure of capital and market, 3D vision industry has appeared "Movement deformation" situation. Different from the 2D vision mature and clear industry division of labor, in the early stages of 3D vision face positioning and boundary confusion, appeared downstream integrators in turn do upstream 3D hardware. For example, in the expansion of its logistics picking solution to industrial loading and unloading scenarios, Star Apex found that the existing cameras on the market could not meet the demand, so it began to develop the upstream AL and LS series of cameras for deep basket loading and unloading scenarios.
And some 3D vision companies have started targeting the downstream business by doing integration projects. For example, Mech-Mind, as a 3D vision product company, serves end customers directly in quite a few industrial robotics projects. This lack of clarity in competitive boundaries has also brought about confusion in the industry chain and a decline in resource utilization.
In addition, some product companies even break business rules and contract integration projects at below-cost prices to win orders. Upstream and downstream enterprises encroach on each other's territory, making the industry more and more "unprofitable". At present, 3D vision companies are generally losing money, according to media reports industry leader Mech-Mindel per capita output of only 100,000 out of the high labor costs and operating costs compared to the obvious anomalies.
Going overseas may be an alternative way of thinking under the structural contradiction of the market at this stage. Mech-Mind went overseas in 2021, thanks to the high pricing of its products overseas, and gradually opened the gap with its competitors. 2022, overseas shipments accounted for 20% of Mech-Mind's total shipments, bringing it more than 40 million in revenue.
In the next one or two years, the 3D vision industry may lead to a round of reshuffle. Influenced by the macro environment and capital cycle, the company that can't get financing and shipment is not as good as expected, may gradually disappear in the flood of the market. The company that survived will accumulate more core technology, stronger industry solutions and large-scale commercialization ability, and gradually approach the international giants in the long-term competition.
Technology and Applications in Tandem: AI and Next-Gen Manufacturing Revolutionizing 3D Vision
China's 3D vision industry is still in its infancy, although in some parts and software with the United States, Europe and Japan, there is a certain gap, but relying on the fast-growing industrial demand and AI technology advantages of the feed, China's 3D vision industry is expected to realize the bend in the road to overtake.
AI and industrial upgrades drive technology development in China's 3D vision industry
According to the data of 2021, China's manufacturing value added accounts for 30% of the world, higher than the combined market of the United States, Japan, Germany, South Korea and other developed countries, but the machine vision market accounts for only 24.6% of the world, and the proportion of 3D vision is even lower. With China's industrial upgrading and manufacturing high-end, China's machine vision industry will usher in a greater downstream demand, which can also provide more application scenarios and data for related enterprises, driving manufacturers to iterate technology and improve service capabilities.
In addition, China's development in AI computing power and algorithms has helped the 3D vision industry iterate rapidly. According to the "2020-2021 China AI Computing Power Development Assessment Report" released by IDC and Wave, China's AI market will account for about one-third of the global market in the future, and China's AI servers have become the backbone of the global AI industry.
The trend of AI-enabled 3D vision is also favored by the capital. 2021 April, Mech-Mind received CNY hundreds of million of Series C financing led by Meituan（美团）, the focus of this financing is also to realize the "3D vision + AI + robotics" solution. Mech-Mind's AI algorithms can enhance the processing capability of enterprises in flexible manufacturing environments, improve the precision of automated product calibration, and thus quickly and accurately locate objects. This technology can enhance the gripping of massive SKUs in the freight industry and the mixed depalletizing and palletizing of various cartons and sacks.
New energy industry sets new starting line for 3D vision.
New energy vehicles are China's flagship export category in recent years, and one of the "new three sorts" of foreign trade（外贸新三样）. 2022, China's new energy vehicle sales reached more than 6 million, which is twice as much as the total sales of electric vehicles in Europe and the U.S., and accounted for more than 50% of the global sales of new energy vehicles. The Starting Point Research Institute expects that global new energy vehicle sales will reach 54.56 million by 2030, with a compound annual growth rate of up to 13.9%; China's new energy vehicle sales will reach 26.52 million, with a compound annual growth rate of up to 1.5 million, and the popularization of new energy vehicles can be said to be one of the themes of the next era.
New energy vehicles is a market where 3D vision has been deeply cultivated for many years. 3D vision applied automation equipment is widely used in automobile OEMs and parts factories, and 3D vision is also widely used in complex production processes such as loading and unloading, testing and equipping. A number of 3D vision manufacturers have proposed solutions for these industry gaps.
Take Speedbot（视比特机器人） as an example, as a leader in the industrial intelligence track, it has deeply cooperated with automobile OEMs and put forward nine solutions for three series of dimensional measurement, appearance inspection, and vision-guided assembly based on AI+3D vision technology, which help automobile customers to reduce costs and increase efficiency in the production process.
Lithium batteries and photovoltaic as the other two major areas of new energy, also has a high demand for 3D vision. Lithium battery process is complex, 3D vision can land a wealth of scenes. Lithium battery battery core before the process, the core after the process, module and PACK section testing need to use 3D vision technology to complete the fine manufacturing.
In the production process of photovoltaic cell wafers, 3D vision can be applied to photovoltaic wafer sorting machines, which can play an effective role in the processing of production debris, cell hidden cracks, surface contamination, and electrode malpractice, etc., and improve the photovoltaic cell photovoltaic conversion efficiency and service life.In 2018-2021, China's photovoltaic production CAGR reaches 35%, and year-on-year growth rate reaches 42% in 2021, driving the machine vision's PV industry application scale from 260 million yuan in 2019 to 650 million yuan in 2021, with a CAGR of 58%.
The Chinese 3D vision industry has evolved from 0 to 1 in just over a decade. Thanks to its competitive pricing and technological advantages, some companies have already embarked on the path of internationalization. However, within the industry's rapid development, there are still some undeniable issues. Practices like companies engaging in price wars and encroaching on the survival space of both upstream and downstream players are worthy of deep consideration by both industry insiders and observers. While there is still a gap in technical expertise compared to their counterparts in the United States, Europe, and Japan, the 3D vision industry holds a promising future, especially with the rapid development of AI algorithms and the trend towards manufacturing intelligence.
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