Industry News

Editor's note: Fostering new quality productive forces is one of China's top priorities in the 15th Five-Year Plan period (2026-2030). Statistics showed that new progress was made in this endeavor in the first quarter of this year. Xinhua hereby presents a series of four stories that examine how China's provincial economic powerhouses are taking the lead in developing new quality productive forces. The following is the first piece that examines how artificial intelligence (AI) is reshaping factory floors in east China's Jiangsu Province, tightening supply chains and sharpening China's manufacturing edge.

NANJING, April 22 (Xinhua) -- In a semiconductor moulding workshop of NESY in Wuxi, east China's Jiangsu Province, robotic arms lift, position and transfer chip components along a production line once known for heat, noise and repetitive manual labour.

Developed by NESY, a commercial robotics company, the system automates more than a dozen steps in semiconductor testing and packaging, improving precision while reducing downtime.

The scene points to a broader shift across China's factory floors, where AI helps manufacturers connect design, sourcing, production and service more closely.

Analysts say this not only improves efficiency at individual plants but also reinforces China's long-standing strengths in dense supplier networks and rapid engineering cycles, thereby fostering a more integrated manufacturing edge.

The momentum is expected to build further as the global race to expand AI infrastructure boosts demand for chips, electrical equipment and automation solutions, encouraging higher capital spending and capacity expansion in China.

SMARTER FACTORY

Jiangsu Province, known for its dense supplier networks and broad industrial base, offers a snapshot of this transition.

NESY's molding system has been widely adopted by semiconductor firms seeking cost-effective automation solutions, Zeng Hao, board secretary of NESY, told Xinhua. Since deployment began in 2023, the company's output value has surpassed 100 million yuan (about 14 million U.S. dollars) in 2025.

Zeng attributed the growth to rising demand from downstream chipmakers, as the expansion of AI-related industries and infrastructure has spurred investment across the semiconductor sector.

The same shift is also pushing multinational manufacturers in China to adopt AI for more complex production.

"AI plays an even more critical role for companies operating in high-mix, low-volume production like Eaton," said Xu Bin, operations manager of Eaton Electrical Equipment Co., Ltd., a subsidiary of Eaton Corporation.

Nearly every order in the power equipment sector requires a redesign, raising the importance of speed and coordination. Since 2020, Eaton's Changzhou factory has built an AI-enabled workflow across its operations, from quotation and design to production and after-sales service.

Five years on, its output has tripled while the headcount has remained largely unchanged, with design efficiency and revenue up 66 percent and 129 percent, respectively, according to Xu.

Such cases reflect a wider investment push across China's manufacturing sector. Official data show that China produced 143,608 industrial robots in the first two months of 2026, up 31.1 percent year on year and faster than the 27 percent growth recorded in the same period last year.

CONNECTED ECOSYSTEMS

Industry insiders note that investment in equipment and software alone is not enough for factory upgrading, stressing the importance of the surrounding industrial ecosystem that enables coordination and rapid scaling.

In this regard, the Yangtze River Delta -- comprising Shanghai and the provinces of Jiangsu, Zhejiang and Anhui -- is emerging as a key hub. So far, the region has formed 26 national-level advanced manufacturing clusters, accounting for nearly one-third of the national total.

Proximity to suppliers is a decisive factor for companies such as Segway-Ninebot. The electric two-wheeler maker has established a manufacturing base in Changzhou, with 70 to 80 percent of its supply chain located within the Yangtze River Delta.

For manufacturers facing more volatile external markets, the supply-chain depth in the Yangtze River Delta offers flexibility, said Xiao Xiao, partner and vice president of the company.

Echoing his view, Yang Jiasheng, vice president of the home products division of Kalerm, a Suzhou-based manufacturer of commercial coffee machines, said a large share of its components comes from local suppliers. "This enables the company to respond more swiftly to market demand by adjusting procurement and production."

As demand grows for smarter products, Kalerm -- whose products are sold in more than 100 countries and regions -- has partnered with Alibaba Group to integrate its large language model Tongyi Qianwen into its self-developed smart coffee system.

The upgrade allows users to operate machines through voice interaction and receive real-time support, including product guidance and beverage recommendations, Yang said.

According to research firm IDC, the share of Chinese industrial enterprises using large models and AI agents rose sharply from 9.6 percent in 2024 to 47.5 percent in 2025, reflecting the broader adoption of AI across China's industrial base.

TECHNOLOGY FOR HUMAN

Yet industry insiders caution that real-world deployment still faces significant challenges, as the complexity of manufacturing environments places high demands on accuracy, stability and system reliability of AI applications.

"AI-integrated manufacturing is not a simple combination of technology and industry, but a deep restructuring across the entire value chain, including R&D, production, management and services," said Lan Jianping, vice president of the Zhejiang Development & Planning Institute.

Looking ahead, the focus should be on fully unlocking AI's potential in manufacturing, while building the talent base to sustain it, he added.

As digitalization and intelligent transformation gather pace, the demand for industrial skills is also evolving, pushing workers away from single-task manual roles toward composite positions.

"We are seeking workers capable of operating smart equipment, navigating digital systems and adapting to integrated, technology-driven production processes," Zeng from NESY said.

That has put pressure on vocational education and training systems to move faster.

The Changzhou Technician College in Jiangsu has established new advanced technician tracks covering smart manufacturing, industrial internet and intelligent control, combining classroom teaching with workshop practice and joint training programs with companies.

One integrated training center jointly built by the school and firms has attracted more than 28 enterprises in the advanced manufacturing sector, with cumulative investment exceeding 265 million yuan. "We aim to bridge the gap between young people's skills and job requirements through this approach," said Mei Xiangdong, the college's president.

"Implementation hasn't been easy, but reform is gaining traction. Where there's light, we follow it and carve out a new path," he said.