Readers of Strategic Fortunes may recall my January journey to CES in Vegas the place I seen almost 40 totally different robotics startups.
The robots are coming quick, and we’ve positioned our portfolios accordingly.
However talking of quick, final week in Beijing a humanoid robotic ran a half marathon in 50 minutes and 26 seconds.
It completed greater than 10 minutes forward of the report for human runners.
Somebody described the video as what it seems to be like once you attempt to run a 5K in your 40s. It actually isn’t swish.
However once you watch it, it’s laborious not to consider what needed to come collectively to make it potential.
Operating 13 miles isn’t nearly intelligence. It’s additionally about management.
Each step must be balanced and corrected in actual time as circumstances change underfoot. That requires a relentless loop of sensing, processing and response. Sensors learn the bottom, software program interprets the information and {hardware} responds immediately.
However once you get previous that, the entire robotic’s motion comes all the way down to motors. Inside its hips, knees, ankles and arms, dozens of them are working collectively to maintain the machine upright and shifting ahead.
And inside each a kind of motors is identical important part.
Magnets.
They’re what convert electrical power into movement. With out them, nothing strikes.
And proper now, that’s a giant downside for the US.
The Magnet Bottleneck
In contrast to vehicles, which depend on one primary motor, robots want a lot of them.
And extra motors imply extra magnets.
A single humanoid robotic can require a number of kilograms of high-performance magnetic materials unfold throughout its dozens of motors controlling motion, steadiness and coordination.
Now think about the potential explosion of humanoid robots that we talked about this week.
Factories and warehouses are already deploying humanoid robots that may adapt on the fly, and firms are testing them for jobs that used to require individuals.
As these machines transfer out of labs and into real-world environments, each provides to the demand for magnetic supplies referred to as rare-earth magnets.
Picture: reliamag.com
However rare-earth magnets are already in excessive demand elsewhere.
Electrical automobiles use them of their drivetrains. Wind generators depend on them to generate energy. And protection methods rely on them for precision and management.
Something that turns electrical energy into movement pulls from the identical pool of magnetic supplies.
And sadly for the U.S., most of that provide runs by China. Actually, China processes roughly 90% of the world’s uncommon earth supplies.
And over the previous 12 months, it has tightened how these supplies transfer by its provide chain.
Exports now require particular licenses and particulars about how these supplies shall be used. China remains to be sending out shipments, however they’ll select to sluggish them down and even redirect them relying on who’s shopping for and for what goal.
For some time, it seemed like we’d work our approach out of our dependence on China.
When uncommon earths had been labeled strategic, the U.S. and Europe moved to construct their very own provide chains. New mines had been deliberate within the U.S. and Australia, and processing services had been proposed throughout Europe.
But it surely hasn’t performed out how we’d have hoped.
Europe lately launched a joint procurement platform for important minerals. Which means, as a substitute of manufacturing sufficient by itself, it’s pooling demand to compete for provide that already exists.
Across the identical time, a serious magnet manufacturing unit undertaking in Europe was canceled.
That tells you the whole lot it’s good to find out about how tough it’s been to rebuild this provide chain outdoors of China.
Even within the U.S., the place corporations like MP Supplies (NYSE: MP) are bringing new magnet services on-line, that effort remains to be within the early phases. It takes years to construct out mining, refining and manufacturing at scale.
And demand isn’t ready. It’s accelerating.
That’s why some corporations aren’t attempting to compete for China’s provide in any respect. As an alternative, they’re making an attempt to bypass it totally.
What does that really seem like?
I name it U.R.E.
The concept is to construct the motors that energy EVs, robots and industrial methods with out relying on rare-earth magnets in any respect.
That’s the course Tesla is already taking.
Elon Musk has stated Tesla’s next-generation motors are being designed with none uncommon earth components. If it really works, it could give the corporate a transparent benefit.
However there are tradeoffs.
Uncommon-earth magnets ship unmatched efficiency. Options might be cheaper and extra considerable, however they’ve traditionally been weaker.
So the problem isn’t simply swapping supplies. It’s additionally redesigning new methods round them.
Which means new motor architectures, new management methods and new methods to handle warmth, effectivity and energy density.
In different phrases, it’s as a lot an engineering downside as a supplies downside.
However as soon as it’s solved, the China bottleneck goes away.
Right here’s My Take
That robotic in Beijing represents what occurs when software program, {hardware} and provide chains all line up.
However scaling that consequence will depend on greater than higher AI fashions. It additionally will depend on constructing giant numbers of machines that depend on tightly built-in elements.
Sadly, a lot of these elements nonetheless hint again to a provide chain that hasn’t diversified as a lot because the U.S. desires it to.
That bottleneck isn’t going away anytime quickly.
However U.R.E. may remedy it.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
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