By Raffaele Huang
SINGAPORE -- In March, Nvidia Chief Executive Jensen Huang showed off a robot version of Olaf, the snowman from the movie "Frozen." Robotic Olaf brings together three of America's best-known companies, with artificial-intelligence know-how from Nvidia and Google powering the Disney character.
But Olaf is also a showcase of China's prowess. It couldn't waddle or sway without components from Chinese robot maker Unitree that power the motion of its neck and legs, according to a research paper by Disney.
Chinese companies are moving to cement their place in the supply chains for humanoid robots, which Huang and Tesla's Elon Musk say are the next big thing in technology. While the U.S. controls the best chips and other technology for robot brains, China holds an unrivaled grip on the manufacturing ecosystem for humanoids' bodies.
China's "microelectronics, their motors, their rare earth, their magnets -- which is foundational to robotics -- they are the world's best," Huang said in a podcast in March. "The world's robotics industry will have to rely a lot on it."
Tesla is building a team in China to work with suppliers for its Optimus humanoid robot, and Tesla employees have visited Chinese makers of sensors, motors and other parts, people familiar with the project said. That is in preparation for mass production of Optimus, which Musk predicted in November would become "the biggest product of all time, by far."
American tech companies have long relied on manufacturers in China to make products such as the iPhone. But some U.S. policymakers are uneasy about how Chinese companies are already taking a central role in the supply chain for humanoids, which could have military and other sensitive uses.
In February, a bipartisan group of House lawmakers proposed legislation for a commission to examine America's competitiveness in robotics, citing supply-chain risks and manufacturing challenges.
Beijing itself is treating the robot supply chain as an area of strategic importance. China has identified " embodied AI" -- the fusion of artificial intelligence with physical systems -- as one of six future industries expected to drive the economy over the next five years.
China said in 2023 that it aimed to develop a resilient domestic supply chain for humanoid robots by 2027, aiming to insulate the country from external shocks and dependence on nations such as Japan and Germany that have expertise in robot parts. In February, the country released its first set of national standards for humanoids spanning key technologies and components.
With so many sophisticated parts available at home, Chinese makers of complete humanoid robots are able to get to market faster. Last year, Chinese companies brought out 28 humanoid models, nearly three times as many as those introduced by American companies, according to Morgan Stanley.
Government subsidies and rising public attention -- fueled by robot sport games and television performances -- have encouraged early adoption and helped Chinese firms secure financing.
Unitree, one of the leading makers of both full robots and robot parts, seeks to raise around $610 million in an initial public offering in Shanghai set for this year. Unitree said it shipped more than 5,500 humanoids in 2025, for uses including research, education and public performances, dwarfing U.S. competitors.
"Large-scale production has further strengthened our bargaining power with upstream suppliers, creating a sustained cost advantage," the company said in its IPO filing.
Morgan Stanley estimated the Chinese supply chain could cut the cost of making a humanoid robot by as much as two-thirds. The components that control the humanoid's motions, including specialized motors and gears, account for around 55% of a robot's total cost, according to research firm TrendForce.
"The advantage of Chinese humanoid startups is the access to their broad supply chain," Kei Onishi, chairman of Yamaha Motor Ventures, a Silicon Valley-based unit of the Japanese motorcycle maker, said last year. "China has the market to test lots of different applications, and suppliers are willing to take the risk."
Still, U.S. robot makers have an edge in access to Nvidia chips and other American AI technology. That is why Chinese companies are also angling for business as parts suppliers.
From Singapore and Tokyo to Riyadh and Las Vegas, Chinese component makers in the past year have become frequent attendees at robot-industry fairs, while companies including UBTech and Unitree have hired local distributors to help reach overseas buyers.
In March, first lady Melania Trump walked side-by-side with the latest humanoid robot developed by Silicon Valley-based Figure AI during a summit on education she hosted at the White House. "I'm Figure 03, a humanoid built in the United States of America," the robot told the audience. In earlier models, Figure AI has used Chinese suppliers for robots' joints, sensors and motors, according to HSBC analysts and people familiar with the matter.
Tesla's bet
While some humanoid robot parts are repurposed from industrial robots, cars and consumer electronics, Tesla is attempting to design and develop many parts on its own. That will give it more control over the technology and optimize compatibility between software and hardware -- but it also means depending on Chinese suppliers that can provide custom-made parts at a good price.
Tesla's dependence on China became clear last year when it had to reduce the use of rare-earth magnets in Optimus after China tightened export restrictions, according to people familiar with Tesla's supply chain.
Last year, Musk said Tesla planned to build a million-unit Optimus production line that could start operations by the end of 2026.
This year, Tesla has spoken with some Chinese suppliers about placing orders for components that would be enough to make thousands of Optimus units, people familiar with the discussions said. The components include sensors, so-called coreless motors that power precise high-speed movements and speed reducers often used in joints to mimic human motions.
Some suppliers have prepared manufacturing capacity in Thailand and other Southeast Asian countries for Tesla, partly to avoid U.S. tariffs on Chinese goods, the people said.
Some Chinese products still lag in quality compared with foreign rivals. People in the business said certain Chinese precision parts wear out more quickly than counterparts from Japan. Still, Chinese suppliers are narrowing the gap and often offer lower prices.
One Chinese manufacturer of screws, a critical component for robotic movements, is racing to match Tesla's higher lifespan standard. The company, which has supplied several Chinese robot makers, faced a strict set of demands from Tesla: shrink the design, boost durability by a quarter and still undercut European pricing by 25%, according to a marketing manager at the Chinese supplier.
"Once we close the gap," the manager said, "our cost structure will become an unbeatable advantage."
Write to Raffaele Huang at raffaele.huang@wsj.com
(END) Dow Jones Newswires
April 02, 2026 23:00 ET (03:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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