A Random Walk down Machine Tool Market

A Random Walk down Machine Tool Market July 31, 2008

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Tech Trend Watch

To cope with changing business environment, technical modernization is a sustaining challenge in all sectors of industry. As we saw in EMO Hannover 2005, process integration and reconfigurability make automation practicable and liable for large-scale users. Here, the concepts are elaborated on integrated system, for instance, machines equipped with robots, image processing systems and sophisticated materials handling capabilities, namely combining as many processing steps as possible in single gear to enable fast changeovers, thus allow numerous different products to be dealt with. Multifunctional gears not only provide optimized user-friendliness but also reduce machining times and the associated logistics, meanwhile with greater precision, enhanced productivity and space-saving advantage. The new robot application for bending tubes simplifies the programming of such automated installations by offering the same controller interface for all elements in the production line from the robot to the machine, meaning that the robot no longer required to be instructed.

Spurred by the up-and-coming nanotechnologynanotechnology, micro machining makes high-precision machining possible on larger workpieces from the tool and mould construction sectors. Surface qualities of fifty nanometres are now utilizable and workpieces no longer need to be polished in some cases. The minimum tools applied in micro machining have a diameter of 30 ?gm for drills and 100 ?gm for milling cutters. Still, machining with such tools is workable merely with modern and adapted machine concepts delivering a corresponding temperature control and superior damping properties. The greater precision makes miniaturization and microproduction possible with considerable future potentials. At the same time, it also largely raises process reliability.

Rapid prototyping and rapid tooling are significant in shortening the time to market of new products. Advanced and integrated coating techniques involve the sensor -based monitoring of machine components, the automatic correction of tool wear as well as remote information and diagnosis functions via mobile phone, the Internet and other communication media.

Global Market Watch

Japan is the world’s largest maker and second exporter of machine tools. According to Japan Machine Tool Builders Association (JMTBA), the orders in 2004 at $11.4 billion soared 45% from the year before, hitting the third largest level after the bubble economy years of 1990 and 1989. Exports surged by 38% thanks to the recovery of machine tool demand in the United States and Europe, besides the expansion in China and the emerging markets including East Europe. JMTBA predicts that overseas orders in 2005 and 2006 at $10.64 billion and $11.11 billion, respectively.

Germany is known as a major technology leader in the arena, also the world’s largest exporter and second producer with a 20% share of the market. In 2004, German machine tool makers sell 60% (or US$5.6 billion worth) of their machines outside the country. Exports grew by 10% in 2004 while domestic sales rising by 4%. In spite of the strength of the euro, overseas orders climbed by 25% during 2004, while domestic customers merely placed 11% more orders. China contributes to the biggest buyer of German-made machine tool, accounting for 17% of foreign demand and 13% of all exports. And the USA, the second biggest customer has been undergoing structural market changes. It was not until 2004 that exports began to increase again. An average 65,000 employees were employed in 2004, about 3% or approximately 1,900 employees less than the previous year. According to German Machine Tool Builders’ Association (VDW), a 4% growth in production is expected for 2005.

Italy remains the third producer and exporter and the fifth consumer in the world machine tool market with export up 17% to US$2.29 billion and imports up 4% to US$0.97 billion. In 2004, Italian machine tool builders experienced an increase of around 13% in their index of aggregate orders, yet mostly from foreign buyers. In the first quarter of 2005, the overseas orders placed to Italian builders of metal working machine tools have marked a 4.6% increase compared to the same period in 2004. However, the domestic market is still stagnant with extremely low value of the index, 30% lower in comparison with that of the base year.

China is the world’s biggest buyer of machine tools, followed by the USA, importing US$5.78 billion, hitting a 39% increase in 2004. Famous as so-called “world factory”, China has been in great demand for machinery products in recent years. In 2004, the consumption of metal -working machine tools reached US$9.46 billion. The country consumed 70,000 units of CNC metal-cutting machine tools, including 47,000 units of domestic-made CNC metal-cutting machine tools. At present, there are more than 2,055 machine-tool-specific enterprises. The domestic builders manufactured a total of 389,284 units of metal-cutting machine tools, a rise of 35.9% over the previous year; 51,861 units of CNC machine tools (+49.8%); 4,354 units of high precision machine tools (+75.3%); and 7,151 units of large-type machine tools (+72.0%).

Taiwan machine tool builders exported $2.29 billion worth gears, marked as world’s No.4 supplier. In 2004, 36.3% of exports were for Mainland China market while 17.9% were for the US market. In fact, the machine tool industry is one of the island’s largest industrial sectors. Among major products, there were 9911 units (+153%) of NC lathes manufactured; 26,636 units (+122%) of non-NC lathes; 1,147 units (+199%) of NC drilling machines; 33,104 units (+138%) of non-NC drilling machines; 1,951 units (+105%) of NC milling machines; 27,673 units (+117%) of non-NC milling machines; 86,751 units (+101%) of bench grinders and 191,007 units (+122%) of sawing machines.

South Korea exceeds US$2.0 billion, recording a brisk performance for the past three years, spurred by investment in production facilities by the major manufacturing industries such as automobile, ship building, telecommunications, and electronics. The current size of the Korean market of imported machine tools is valued at US$1 billion, accounting for 40-50% of total market share. Korea’s metal working sector explains 25% of the total machine tools market share, followed by the automobile industry at 24%, the general machinery sector at 22%, the electronics industry at 11%, and the ship building industry at 5%.

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