Modern Machine Shop

MAY 2018

Modern Machine Shop is focused on all aspects of metalworking technology - Providing the new product technologies; process solutions; supplier listings; business management; networking; and event information that companies need to be competitive.

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Page 83 of 179

MMS MAY 2018 82 WORLD MACHINE TOOL SURVEY culture. As a result, fewer machines from Taiwan were available to U.S. consumers. The net effect of these facts about consumption and import/export trends is that machine tools have been increasingly difficult to acquire in this country. However, there are other significant fac- tors influencing the global supply of machine tools. For example, global machine tool production increased rapidly in 2017. It went up by almost 7 percent, the highest rise in one year since 2011. This jump strained the supply chains of machine tool builders, thus creating a scarcity of many critical components such as ballscrews, guide- ways and base castings. Therefore, even though demand now calls for an increase in production, machine tool builders simply cannot comply because they cannot get the needed parts to make the machines. Furthermore, electronics giants such as Samsung are dramatically increasing their capital equipment expenditures. A Wall Street Journal article from January 9 called "Tech's Enormous Scale: Samsung Now Outspends Exxon and Shell Combined," reported that "Samsung Electronics Co. spent more money on capital expenditures last year than any other publicly traded company." The $44 billion total tops the combined capital equipment spending of the world's largest energy companies. According to the article, Samsung plans to spend an additional $110 billion over the next three years. Much of this investment will go toward the production of memory chips for all those devices we carry in our pockets and wear on our wrists. So, how does this contribute to the difficulty in getting a new machine tool? Samsung, and other companies like it, are investing heavily in equipment used to manufac- ture semiconductors. Most of these machines use the same guideways and other components as machine tools. This massive demand by technol- ogy companies soaks up critical parts for machine tools, further inhibiting machine tool builders from responding to the recent surge in demand for their products. How to Respond This development leaves U.S. metalcutting facil- ities struggling to acquire new machinery at a rate that is likely not fast enough to meet current manufacturing needs. So what can these compa- nies do in the meantime to increase production and capacity? Here are some questions that might give possi- ble answers: 1. What automation equipment—robots, rotary tables, bar feeders, pallet systems and so on— can be used to increase productivity on exist- ing or available machines? 15B 14B 13B 12B 11B 10B 9B 8B 7B 6B 5B 4B 3B 2B 1B 0B China vs. U.S. Real Machine Tool Imports 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 U.S. CHINA While U.S. machine tool imports increased about 7 percent in 2016, Chinese machine tool imports increased by 15 percent, more than double the rate in the United States. This relative shift of machine tools to China made it more difficult for U.S. buyers to get the machines they wanted.

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