Robot Demand's Next Wave Is Everywhere but Autos

Fifteen years ago, autos accounted for 70% to 80% of all industrial robot demand, according to Morten Paulsen, head of research and managing director at CLSA Japan, speaking on a webcast reported by ETF Trends; today, even in North America, autos represent roughly 45%, and the non-automotive buyer has quietly become the industrial robot industry's growth engine. Electronics, aerospace, defense, energy and, eventually, consumer goods account for the rest — which is why thematic robotics ETFs deserve a fresh look.

The shift was already building before the pandemic, Paulsen noted, with COVID as a significant accelerant, and China offers the clearest preview of the end-state: its electronics industry has overtaken automotive as the country's largest driver of robot adoption. That rotation is now reaching the U.S., where global factory automation companies have reported top-line growth accelerating from 14% in the first quarter to 24% in the second quarter of this year. Aerospace and defense are strong performers in the current cycle, oil and gas has recorded a meaningful pickup since March, and Paulsen expects the next leg to come from consumer goods.

The largest potential sits in warehouses and logistics, where Paulsen estimates roughly 80% of U.S. warehouses still run on standard forklifts despite years of automation coverage; with labor shortages tightening, that ratio should rise sharply. AI underpins the expansion, speeding robot installation, programming and integration into factory processes, and lowering the entry cost for industries that previously lacked the technical infrastructure to automate. AI also creates new revenue streams for robot makers — predictive maintenance, remote monitoring and a growing business of robots making robots — which changes the math for corporate buyers. For advisors, the immediate product hook is thematic: ETF Trends points to strategies like the ROBO Global Artificial Intelligence ETF (THNQ).

The robotics thematic used to be a proxy for automotive capex; it now tracks manufacturing everywhere, with the adoption curve spreading across every sector that runs a factory. That progression lines up with this publication's prior finding that job openings are the robotics trade's leading indicator, with factory job openings predicting installations roughly a year out. If four-fifths of U.S. warehouses are still moving pallets with forklifts, the cycle may only be beginning — and advisors treating these ETFs as an auto-cycle play are a decade late.