Readers of Strategic Fortunes may recall my January journey to CES in Vegas the place I considered 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 like once you attempt to run a 5K in your 40s. It actually isn’t sleek.
However once you watch it, it’s onerous not to consider what needed to come collectively to make it doable.
Working 13 miles isn’t nearly intelligence. It’s additionally about management.
Each step must be balanced and corrected in actual time as situations change underfoot. That requires a continuing 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, all the robotic’s motion comes right down to motors. Inside its hips, knees, ankles and arms, dozens of them are working collectively to maintain the machine upright and transferring ahead.
And inside each a kind of motors is identical crucial part.
Magnets.
They’re what convert electrical vitality into movement. With out them, nothing strikes.
And proper now, that’s an enormous downside for america.
The Magnet Bottleneck
In contrast to automobiles, which depend on one most important 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 take into account 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 folks.
As these machines transfer out of labs and into real-world environments, each provides to the demand for magnetic supplies generally known 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 programs 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 yr, it has tightened how these supplies transfer by its provide chain.
Exports now require particular licenses and particulars about how these supplies will probably be used. China remains to be sending out shipments, however they’ll select to gradual them down and even redirect them relying on who’s shopping for and for what function.
For some time, it appeared like we’d work our method 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.
Nevertheless it hasn’t performed out how we’d have hoped.
Europe not too long ago launched a joint procurement platform for crucial minerals. Which means, as an alternative of manufacturing sufficient by itself, it’s pooling demand to compete for provide that already exists.
Across the similar time, a serious magnet manufacturing unit venture in Europe was canceled.
That tells you the whole lot it’s good to learn about how troublesome it’s been to rebuild this provide chain exterior of China.
Even within the U.S., the place firms like MP Supplies (NYSE: MP) are bringing new magnet services on-line, that effort remains to be within the early levels. It takes years to construct out mining, refining and manufacturing at scale.
And demand isn’t ready. It’s accelerating.
That’s why some firms aren’t making an attempt to compete for China’s provide in any respect. As a substitute, they’re trying to bypass it fully.
What does that truly appear like?
I name it U.R.E.
The thought is to construct the motors that energy EVs, robots and industrial programs with out relying on rare-earth magnets in any respect.
That’s the route Tesla is already taking.
Elon Musk has mentioned Tesla’s next-generation motors are being designed with none uncommon earth parts. If it really works, it could give the corporate a transparent benefit.
However there are tradeoffs.
Uncommon-earth magnets ship unmatched efficiency. Options may be cheaper and extra ample, however they’ve traditionally been weaker.
So the problem isn’t simply swapping supplies. It’s additionally redesigning new programs round them.
Which means new motor architectures, new management programs 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 is dependent upon greater than higher AI fashions. It additionally is dependent upon 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. might remedy it.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
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