As the market eagerly awaits the rise of humanoid robots, Taiwan's leading precision gear reducer manufacturer, Apex Dynamics, believes it will take time for the technology to mature.
However, setting aside humanoid robots for now, other robotic applications show significant growth potential. Apex Dynamics has already made inroads into the more established logistics robot market, successfully supplying Amazon's latest logistics warehouses with in-house mobile robots and seven-axis robots.
Gear reducers are critical components for robots and automation equipment, functioning like the "screws" of the industry. They are essential for precision positioning and control, with applications spanning a wide range of industries.
This broad applicability has allowed Apex Dynamics to diversify its portfolio, mitigating the impact of asymmetric economic recovery on any single industry. Although the machinery sector has yet to see a significant rebound, Apex Dynamics has performed exceptionally well.
In July, Apex Dynamics reported consolidated revenue of NT$269 million, marking a 14.86% month-on-month increase and a 20.92% year-on-year rise. For the first seven months of the year, cumulative revenue reached NT$1.787 billion, up 9.92% year-on-year. The company's core business maintained a high gross margin of 50.6% in the second quarter of 2024.
While some expect Apex Dynamics to lead the robotic supply chain, CEO Arthur Kuo emphasizes that the development of humanoid robots still faces many limitations and challenges. Before these robots significantly contribute to revenue, the company remains in the "dream phase," indicating that more time is needed for the technology to mature.
Regardless of the type of robot, gear reducers are generally required, with humanoid robots alone expected to need up to 40 joint modules, thereby driving demand for these components. Additionally, because humanoid robots are designed to resemble humans, there are size constraints on the joints, making the gear reducer's role even more crucial.
Putting humanoid robots aside, Apex Dynamics has already established a foothold in the more mature logistics robot market, specifically by entering a new logistics warehouse for a major US client. The company is supplying in-house mobile autonomous robots and semi-humanoid robots.
The first phase of collaboration with this major client has been finalized, with two batches of gear reducer products shipped in the first half of 2024, and completion expected by mid-2025. Given the client's proactive approach—seeking out Apex Dynamics and visiting their Taiwan factory—there is strong potential for securing second and third-phase cooperation agreements.
Industry insiders have identified the client as Amazon, the US e-commerce and logistics giant. Recently, several of Amazon's West Coast warehouses have experienced overcapacity, with rejection rates reaching 90%. The need for warehouse expansion is pressing for Amazon, creating urgency across its supply chain.
Apex Dynamics has noted that due to the current full capacity at its main plant, it plans to expand production at its third plant in central Taiwan. Currently, the utilization rate of the third plant's floor space is less than 30%, leaving ample room for expansion. This plant will also be central to the production of new products under development.
Looking ahead to 2024, Apex Dynamics expects its revenue in the second half of 2024 to surpass that of the first half, with gross margins remaining above 50%. Revenue is anticipated to maintain double-digit growth, and full-year EPS is expected to exceed the NT$10.89 recorded in 2023, with a potential challenge to the record high set in 2022.
