Metalworking Machinery Manufacturing
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Industry Overview
The US metalworking machinery industry consists of about 7,500 companies with combined annual revenue of about $20 billion. Major companies include Kennametal, Hardinge, Hurco, and MAG Giddings & Lewis. The industry is fragmented: the largest 50 companies generate about 30 percent of revenue.
The global metalworking machinery manufacturing industry generates about $65 billion in annual revenue. Top metalworking machinery producing countries include China, Japan, Germany, Italy, South Korea, and Taiwan. The leading exporters of metalworking machinery are Japan, Germany, Italy, and Taiwan. Major companies include GILDEMEISTER AG (Germany), Okuma Holdings (Japan), and Dalian Machine Tool Group (China).
Competitive Landscape
Demand is closely linked to US industrial activity. The profitability of individual companies depends on the complexity of their product designs and their manufacturing efficiency. Large companies have the resources to make complex, automated machinery. Small companies can compete successfully by making specialty products, replacement parts, or accessories. The industry is labor-intensive: average annual revenue per employee is $130,000.
International trade in metalworking machinery is substantial because of the high value of the products, mainly for machining centers and cutting tools. Many US manufacturers have foreign sales operations and some have foreign manufacturing sources. Imports account for about 45 percent of the US market, largely from Japan, Germany, and Canada. Exports account for more than 30 percent of US production, of which half goes to Mexico, Canada, and China.
Products, Operations & Technology
Major products include dies, molds, cutting tools, and machining centers. Dies and molds account for about 50 percent of industry revenue, metal cutting and forming machinery for 25 percent, and cutting tools and machine tool accessories about 20 percent. The industry itself relies on metalworking machinery to make products. The primary manufacturing facilities are specialized foundry and machine shops.
Dies and molds are used to make products by taking on the outside shape of the product. Dies are used to stamp shapes into metals, plastics, and other materials, often with the aid of a hydraulic press. Molds hold a shape while a molten substance like metal, glass, or plastic is poured or blown inside. Dies and molds are typically cast from metal into rough form and finished with machine tooling. Because dies and molds must be specially made for each product, there are few economies of scale in their production. They are often made by small companies that specialize in a particular type of application and who work in close cooperation with the customer.
Machining centers are used to cut away material from a semi-finished product by drilling, cutting, milling, grinding, and other operations. Two major types are vertical machining centers (VMC) and horizontal machining centers (HMC). "Multi-tasking" machining centers can perform several operations in sequence on a "workpiece." Many machining centers are operated with computer numerical controls (CNC). To improve precision, machining centers are heavy and consist of a stage that holds the workpiece, and one or several high speed power devices that apply various cutting tools. In addition to large amounts of steel, major components used in production are electric motors and computer controls.
Cutting tools are made from hard materials like high-speed steel (HSS) or tungsten carbide, but are worn down in the manufacturing process and must frequently be replaced. Manufacturers of machining centers supply cutting tools for their machines, but independent manufacturers also produce a large variety of cutting tools that can be used in machining centers. Cutting tools like drill bits and saw blades are also used in other types of machines besides machining centers. Because of the very high melting point of carbides, the manufacture of carbide tools requires special manufacturing techniques such as liquid phase sintering and chemical vapor deposition (CVD).
Finished products typically are heavily used and therefore wear out rapidly. Cutting tools, especially, must regularly be replaced, but dies and molds also wear out or are replaced by new designs. Machining centers have a typical useful life of three to five years.
Computer and material technologies are very important for manufacturers of machine tools and other metalworking machinery. Manufacturers of cutting tools must know which materials are most suitable for a wide variety of applications. Computer controls are essential for operating machining centers and producing dies and molds. Dies and molds, which may be small enough to produce pieces of jewelry or large enough to make car panels, are often made using computer-aided design and manufacturing processes (CAD/CAM) that can produce prototypes and finished products directly from computer designs.
