Chinese robotics firms, facing U.S. restrictions on advanced robots, can potentially reach American consumers by setting up operations in Singapore, according to Choon Chong Tay of Vertex Ventures China. He suggests that these companies can maintain control over critical components, such as chips, in Singapore, thus allowing them to market their products in the U.S.
This approach comes in the wake of a July ban by the Trump administration on foreign-made humanoid robots, which has significant implications for Chinese manufacturers like Unitree Robotics, which derives over 40% of its revenue from international markets, including 18% from the U.S.
The strategy proposed by Tay remains untested, as U.S. trade rules typically determine a product's origin based on where it is substantially transformed. Tay believes that American demand for affordable Chinese-made products will ultimately drive market access, provided that Singapore-certified robots meet safety and pricing standards.
The broader context involves a decoupling of U.S.-China relations in the robotics sector, with potential impacts on the physical-AI industry. Bernstein analyst Dien Wang notes that China's control over rare earth materials used in robotics could influence the competitive landscape.
Overall, this situation presents both challenges and opportunities for investors in the robotics and technology sectors