The machine tool industry in China is at the dawn of a new era, characterized by a surge in domestic manufacturers capitalizing on the balance between cost and performance to gain market shareKey industries, including aerospace and new energy vehicles, are evolving, creating significant opportunities for high-end machine toolsAs automation and intelligence converge in the robotics sector, the machinery that lays the groundwork for these technologies—known as industrial mother machines—is poised for an upscale transformation.

The latter half of 2024 has seen a rapid acceleration in equipment renewals, driving an increased demand for machine upgradesThis trend is pushing the industrial mother machine supply chain toward higher-end solutionsChina's mid-range machine tools offer significant cost advantages; moreover, both volume and price growth in exports indicate a robust international position

Advertisements

As the domestic machine tool industry improves its efficiency and capabilities, the domestic production rates and performance of high-end machinery continue to climbThe demand for mid- to high-end machine tools, particularly five-axis machines, is gradually being unlocked, and publicly listed companies in China are breaking through technological barriers, demonstrating improved performance and disciplined capacity expansion.

Consumer markets, such as the burgeoning electric vehicle sector, along with specialized military applications in aerospace, have emerged as engines of growth for industrial mother machinesHigh-value products like five-axis linkage machines and high-precision grinding tools are expected to outpace industry growth ratesThe strength of China’s automotive parts supply chains and the electronic manufacturing sector's inherent capability for large-scale production significantly enhances the prospects for commercializing humanoid robots

Advertisements

Notably, industrial mother machines are critical for the mass production of essential components within humanoid robots, creating synergy throughout the supply chain and resulting in shared cost efficiencies.

As signs of inflection points become evident, recent trends indicate a decline in imported CNC machine tool quantities, while exports have soared, with average export prices significantly lower than importsFor example, in October 2024, the average export price was around $690 compared to $51,255 for imports, underscoring the substantial upgrade potential for domestic machinesPolicy support has flourished since 2023 to bolster the industrial mother machine sector, with fiscal incentives not only fortifying macroeconomic backing but also driving increased R&D investments among machine tool firms.

The previous peak in machine tool sales occurred from 2011 to 2014, resulting in a significant backlog of aging equipment

Advertisements

By 2020, approximately 8 million machine tools were operational in China, with over 60% exceeding a decade of active serviceResearch suggests that at least 4.8 million machines are approaching full renewal or decommissioning, leading to an expansive market opportunity that could pivot toward replacement demand starting in 2024.

As of October 2024, cumulative production figures for Chinese metal cutting and forming machines reached approximately 567,000 and 136,000 units, respectively, with both categories reporting continuous growth for four consecutive months—a promising sign for the industry.

Publicly traded machine tool companies in China are expanding their operationsFor instance, Qinchuan Machine Tool, through its 2023 placement project, is focusing on five-axis machines and the mass production of critical components

• Bank-Resold Funds Ignite New Price War
• Record Online Sales During Holiday Shopping Season
• Rising Bankruptcy Rates in the U.S.
• BMW Reenters the Price War
• Acceleration of Machine Tool Industry Chain Evolution

Upon completion, the company's high-end five-axis machining center is projected to achieve an annual capacity of 248 units, along with significant output for ball screws and various precision tools.

Haomai Technology is another player in the market, specializing in multi-axis composite machiningTheir product offerings heavily feature five-axis machines and include a series of CNC products aimed at various industrial applicationsThis division observed revenue growth exceeding 140% in the first half of 2024, indicating robust market engagement and profitability prospects.

Given the accelerated pace of domestic substitution in core components, China's past experiences—especially the rise of Japan’s CNC machine tool industry—have undoubtedly shaped current strategiesJapanese machine tool exports focused on mid- to high-end machinery, strategically avoiding head-on competition with top-tier producers in the U.S

and Germany, while emphasizing products that gained traction in broader markets.

The structure of machine tools primarily consists of fundamental components, including the structural elements, control systems, transmission systems, and tool changersNotably, the cost of key components such as CNC systems represents approximately 30% of total production costsDomestic advancements have been observed in producing high-end CNC systems, spindles, ball screws, and control mechanisms at a scale capable of meeting growing demands.

Five-axis linkage CNC technology is critical for the machining of essential aerospace components such as turbine blades and boat propellers, while spindles serve as essential, consumable parts within these machinesGenerally, spindles require specialized maintenance or replacements multiple times over their lifecycle.

Huagong Technology has developed its fifth-generation intelligent 3D laser cutting equipment integrated with AI, reporting revenues of around ¥1.727 billion for the smart manufacturing segment in the first half of 2024, a 17.24% year-on-year increase.

Kede CNC is constructing an advanced intelligent manufacturing center in Yinchuan focusing on high-end machine tool core components

Their new facility is set to scale production for spindles and innovative five-axis equipment, responding to market needs with future capacity projections exceeding 1,100 machines annually.

The global market for ball screws reached approximately ¥13.6 billion in sales in 2023, with expectations to grow to ¥20.22 billion by 2030. Leading players like THK and NSK command significant global market shares, but local suppliers are increasingly positioned to capture portions of this market, given their efficiency in R&D and production cost reduction.

Bester Precision has started rolling out its high-precision ball screw assemblies and guide rails to domestic machine tool manufacturers, establishing fruitful engagements with major customers and initiating batch delivery ordersWith plans to expand overseas, Bester's Thailand facility is set to commence operations in the latter half of 2024, aiming to leverage international market opportunities.

Haitian Precision is committed to self-control over core components

It has successfully developed non-standard servo tool changers and torque motor-driven turntables, among other key high-end componentsTheir product pricing remains highly competitive compared to international imports, further solidifying their market presence.

The machine tool sector fundamentally supports a massive manufacturing workload that represents up to 50% of the total industrial processing capabilitiesThis nexus underpins the burgeoning Chinese metal product industry, with relationships echoing historical trends observed in Japan’s automotive and electronic sectors, which nourished extensive growth in domestic machine tool production.

Kede CNC has prioritized user collaborations in aerospace to ensure the stability and reliability of their five-axis machines, smoothing their path for industrial integration.

Insights indicate that specialized market needs driven by military and aerospace sectors will catalyze another growth phase for industrial mother machines