The Computer Numerical Controls (CNC) market will fluctuate considerably over the next five years as demand moves from the industrialized nations to the emerging growth markets in China, Korea, Taiwan, and India, according to the “CNC Worldwide Outlook," a new ARC Advisory Group study.
The global CNC market is expected to grow at a compounded annual growth rate (CAGR) of 0.9 percent over the next five years. In 2005, the market was $4.45 billion and is forecasted to be over $4.60 billion in 2010, the study reports.
Although, over the next five years, it is projected that the rapidly growing CNC market will face a rapid decline across the industrialized nations, the increase in purchases by by companies in developing regions is expected to keep the in a positive growth trend.
“Historically, the CNC market has been highly cyclical and ARC expects this trend to continue. ARC predicts that the emerging markets will help to smooth this cycle through continued and rapid growth. However, the effects to this market will not be fully realized for many years,” according to Analyst Stefan Surpitski, the principal author of the ARC study.
CNC suppliers, who have focused solely on performance, are finding themselves left out of the recent growth spurt in China, Korea, Taiwan, and India. These markets, more focused on price rather than capabilities, are purchasing low-end to mid-range machines.
The larger CNC suppliers are better prepared to meet the needs of this growing market, while also offering enhanced service and sales support. The top three CNC suppliers dominate sales in these emerging regions.
CNC control technology is facing changes also. What was considered a mid-range control just a few years ago is now a low-end control; and high-end controls, due to improved functionality, are now considered mid-range.
For end users, this trend allows them to add functionality at the same price, giving them the ability to machine better parts and increase profits. But this could pose problems for companies looking to upgrade to more advanced controls, since currently available low-end and mid-range controls might be too complex for workers with low skill levels.
As the developing Asian market continues to grow, competition among the top three suppliers is increasing also. The top CNC suppliers all have applications specifically designed to target Chinese, Korean, Taiwanese, and Indian markets, which are now buying low-end CNC controls.
In these growing markets, companies are increasing there purchases of these controls and the unit sales in these countries is significantly overtaking the unit sales in other world regions for several of the suppliers in the CNC control market.