The International Federation of Robotics (IFR) in its annual report forecast Chinese demand for robots will grow 15-20 percent this year after surging 59 percent to 137,920 units last year.

With China accounting for 36 percent of the global robot market and with its sales volume exceeding the total of Europe and the Americas combined, slowing demand growth in the Asian nation is also impacting global demand.

IFR, which brings together nearly 60 global robot suppliers and integrators, predicts worldwide industrial robot sales this year will grow 10 percent compared to last year's 30 percent.

Because of the trade war, many global manufacturers "are now in a wait-and-see mode, wondering whether to shift production (away from China) to, let's say, Vietnam or the United States," IFR President Junji Tsuda told Reuters in an interview.

China's robot market benefited last year from accelerated automation at smartphone and automobile plants. Foreign suppliers, mainly European and Japanese robot makers, accounted for 75 percent of robot sales in China, including those produced locally.

"In the beginning of 2018, the demand for robots from China lost impetus compared to the huge increase of sales in the first half of 2017," the IFR said in its report.

Tsuda, also the chairman of Japan's Yaskawa Electric Corp, said the manufacturers would move out of the wait-and-see mode by the end of this year.

It will take a while for the direction of the trade war to be clear, Tsuda said. "But global demand for smartphones, semiconductors and autos have been solid, and the time will eventually come that they can wait no longer and will resume investment to meet the demand."

Yaskawa, one of the world's top robot manufacturers, last week cut its annual operating profit forecast to 59 billion yen ($524.40 million) from 65.5 billion yen, citing a slowdown in smartphone-related demand in China and growing caution over the trade dispute.

From next year onwards, however, IFR expects the global robot market growth to pick up again, forecasting an average 14 percent increase per year through 2021.

Renewed fears of a broadening economic impact from the trade conflict sent China's benchmark stock index <.SSEC> to four-year lows on Thursday, dragging down shares of Yaskawa, Fanuc Corp and other Asian companies with large Chinese market exposure.

Shares of Yaskawa closed down 7.8 percent and Fanuc fell 4.1 percent on the Tokyo Stock Exchange.

(Reporting by Makiko Yamazaki; Editing by Muralikumar Anantharaman)