Another painful episode is unfolding once again: Japan complains about the transfer of high-end motor technology, while China is rising comprehensively!

According to a report by Kyodo News on June 25, two Japanese employees from Fujitsu Electric Group were detained in Dalian City in May. One was a senior executive of Fujitsu Electric's local legal entity, and the other was a staff member on business trip to China. Both were suspected of smuggling rare earth materials.

Chinese customs authorities believe the two attempted to process rare earth magnets into motors and other products in a disassemblable state before export, with the intention of dismantling the exported products afterward to extract the rare earth magnets. Quoting informed sources, Kyodo News stated that after China strengthened export controls on Japan in January this year, it has become extremely difficult for Japanese companies to obtain permission to export rare earths.

Now, many Japanese media outlets have begun what they call "reflection," claiming that some Japanese firms established joint ventures with Chinese enterprises in order to access rare earth resources and enter the Chinese market. It was precisely during this process that Japan’s magnet manufacturing technology was transferred to Chinese companies. Rare earth ores were shipped out of China, while magnet technology flowed into Japan. Once China secured both elements, Japan found itself overtaken.

Today, Japanese industry is repeatedly calling for preventing the transfer of high-performance servo motor manufacturing technology to China again. Yet, a similar painful lesson is still being replayed.

Servo motors are core components of industrial automation, often referred to as the "heart" of industrial manufacturing. Japanese brands such as Yaskawa, Panasonic, and Mitsubishi have long dominated the global market.

But the data is shifting. The global servo motor market is expected to reach approximately $12 billion by 2025, with the Chinese market alone accounting for around 32 billion RMB, growing at an annual rate exceeding 15%. Japanese brands combined hold about 35% of the market share, while domestic brands have risen to around 30%.

In the domestic Chinese market, the overall market share of domestic brands has already surpassed 50%. Inovance Technology leads among domestic brands with about 15% market share.

China is now the world’s largest servo motor market, with an annual growth rate exceeding 15%. Not establishing factories in China means losing the market; yet setting up plants in China risks having technology copied again.

Nidec, a major Japanese motor giant, has chosen to continue investing heavily in China. Its newly built smart motor factory in Zhejiang province began operations in 2024, specializing in motors for electric vehicles and industrial automation, with an annual production capacity of 2 million units. Approximately 99% of the materials and components used in Nidec’s drive motor systems come from China.

The domestic substitution of servo motors is accelerating, but it is not yet complete.

Core components such as high-precision optical encoders and high-reliability bearings still require imports. Domestic brands still face a technological gap of about 15 to 20 percentage points in high-end bus-type and direct-drive motors. Japanese leaders like Yaskawa, Mitsubishi, and Fanuc still maintain advantages in premium markets.

Yet the gap is narrowing. Domestic encoders have achieved mass application in the 17- to 20-bit resolution range. China holds about 70% of the world’s rare earth reserves and produces roughly 85% of global neodymium-iron-boron permanent magnet materials—providing significant raw material and cost advantages for domestic servo motors.

The competition focus has shifted from hardware specifications to integrated system capabilities combining "motor + drive + algorithm + application scenarios." Whoever can build a complete technological ecosystem will lead the next round of competition.

The story of rare earth magnets from ten years ago is now repeating itself in the servo motor sector. But this time, China holds not only the rare earth ore, but also rapidly catching-up technological capabilities and the world’s largest market. Whether Japan laments technology transfers or fears loss of market share, the trend is clear: China is evolving from a mere exporter of rare earth minerals into a leading manufacturer of high-end motors.

Original article: toutiao.com/article/1869196133514240/

Disclaimer: This article represents the personal views of the author