(Yicai) July 7 -- Chinese auto parts firms are turning to new technologies and businesses, including humanoid robots, as rising raw material costs and automakers' deepening price-cut demands squeeze suppliers from both ends of the supply chain.

Suppliers are pursuing cost-saving technologies and expanding into emerging sectors as soaring prices for copper, rubber, and automotive-grade memory chips erode profitability, while automakers continue to demand deeper annual price cuts after more than three years of industry-wide price wars.

The strain comes as prices for key materials, including copper, natural rubber, and automotive-grade memory chips, have climbed sharply. Annual price reduction requests that traditionally ranged from 3 percent to 5 percent have gradually risen to more than 10 percent.

The London Metal Exchange's spot copper settlement price fluctuated between USD12,000 and USD14,000 per ton in the first half, up 30 percent to 40 percent from a year earlier. Battery electric vehicles consume 80 kilograms to 100 kilograms of copper each, three to four times as much as gasoline-powered vehicles.

China's domestic natural latex spot prices have traded between CNY16,000 and CNY18,000 (USD2,230 to USD2,510) per ton, about 21 percent higher than the 2025 average. Meanwhile, spot prices for automotive-grade memory chips almost tripled between March and June, while high-end automotive-grade DDR5 chips surged by more than fourfold.

Many global auto parts suppliers have responded by raising prices. Ireland-headquartered TE Connectivity increased prices across all product lines and regions by 5 percent to 12 percent starting Jan. 5. American suppliers Molex and Amphenol Corporation also announced price increases around mid-year. Molex raised prices by 5 percent to 30 percent across all product categories, with copper-intensive products seeing increases of as much as 30 percent, while Amphenol increased prices by 5 percent to 15 percent.

The tire industry has also experienced three rounds of price increases this year -- in March, April to May, and June -- with more than 80 companies issuing price adjustment notices.

Even so, suppliers acknowledge that passing higher costs on to automakers remains extremely difficult.

"We adopt a selective and targeted pricing strategy," said Nathaniel Madarang, tire maker Goodyear's president for the Asia Pacific. “We only adjust prices in market segments with relatively low price elasticity.”

Seeking New Growth Opportunities

Many companies are also looking beyond traditional automotive markets for growth opportunities.

At the recent electronics trade fair Electronica China 2026, TE Connectivity signed a strategic agreement with China's Boway Alloy, SBT Ultrasonic Technology, and Switzerland's Komax to develop an end-to-end aluminum-for-copper solution spanning materials, equipment, manufacturing processes, and vehicle production.

More than 35 Chinese and international auto parts companies, including TE Connectivity, Germany's Schaeffler, Bosch, Ningbo-based Tuopu Group, Joyson Electronics, and Sanhua Intelligent Controls, announced robotics-related initiatives in the first half of this year.

Sun Xiaoguang, vice president and general manager of TE Connectivity's automotive division in China, said that it is the right time to enter the humanoid robotics field from the perspective of technological compatibility.

Humanoid robots must withstand complex operating conditions such as outdoor environments, continuous vibration, and waterproofing, while also balancing large-scale production with cost control, Sun said. Automotive-grade systems have undergone long-term rigorous validation and are currently the most mature standards for robot development, he added.

Despite the industry's dual pressures, some executives remain optimistic.

"Although raw material prices fluctuate, transportation remains a rigid daily demand," Goodyear's Madarang said. “We believe changes in raw material prices are temporary, and over the long term, the market's resilience will help prices return to previous levels.”

Editor: Emmi Laine