The laser cutting machine market was valued at around USD 1,086 million in 2019 and is anticipated to grow at a CAGR of 8.2%
Laser cutting is a technology that employs the use of gas, crystal, and fiber to cut various metals and non-metals. These machines offer absolute precision and are capable of cutting different types of materials, ranging from steel to wood. Manufacturing industries such as automotive, industrial equipment, oil and gas, and consumer electronics require complex geometrical components with the highest accuracy. Over the past few decades, laser cutting machines have undergone remarkable improvements in terms of design and technologies, which have enabled them to improve end-product quality, the thickness of material to be cut, power consumption, and efficiency. With these advancements, conventional laser cutting machines are being phased out and replaced with laser cutting machines that can operate automatically with ease across various sectors.
Over the past few years, consumer behavior has changed considerably. The emerging urban middle class, easier credit availability, deep discounts, and instant delivery options are among the key factors that will affect the demand for laser cutting machines. The increasing demand for goods needing precision cutting is expected to drive the consumption of laser cutting machines. For instance, as per the GSM (Global System for Mobile Communication) Association, around 5 billion people are connected to mobile services, a number which is expected to reach 5.9 billion, or roughly 71% of the global population by 2025. The world has turned its focus towards the use of alternative energy sources instead of fossil fuels, which has necessitated the use of machines with high cutting precision.
Growing demand for metal processing services on account of rapid industrialization from developing markets has led to an increase in the adoption of laser cutting machines. Thailand, Vietnam, and Indonesia, among other economies in South Asia, are expected to contribute significantly to the increasing consumption of laser cutting machines.
Emerging economies are now turning out to be lucrative manufacturing hubs owing to inexpensive labor, cheap land rates, and government initiatives that promote these economies as manufacturing powerhouses. Robotics is rapidly emerging as a sector of interest owing to the high amount of automation it brings to modern manufacturing industries. Manufacturers have been focussing on achieving high growth rates, and most of them are aggressive in their search for new opportunities. However, the limited growth the sector is experiencing and global slowdown are expected to restrict market growth to a certain extent. In addition to this, many global car users are now opting for customized vehicle parts, which is expected to lead to the higher consumption of laser cutting tools and positively influence the market. For instance, global vehicle parts trade was pegged at USD 364 billion in 2017, an increase of USD 6 billion compared to the value in 2016.
Recession, credit crunch, and global economic slowdown have compelled manufacturers to undertake cost-cutting measures, which entail automating most or all of the manufacturing processes in a bid to minimize labor induced error. Companies involved in manufacturing laser cutting machines are likely to imbibe artificial intelligence and internet-of-things (IoT) to provide higher connectivity to end-users and increase their market presence by constant innovation. In addition to this, the use of advanced robotics, edge computing, 3D printing, and big data are expected to bolster market growth in years to come.
The global gross domestic product (GDP) has increased significantly over the years. The figure grew from USD 66.05 trillion in 2010 to USD 85.91 trillion in 2018, as per the World Bank. Rising consumption of various goods and services by consumers around the globe, especially those rising in emerging economies, is a key factor contributing to this growth. Consumer goods manufacturers are on their toes and replying on innovation to improve their product offerings, which has led to higher sales and demand for machines that can precisely cut metal in the desired shapes.
Deep discounts and higher operational costs have led many airline players to invest in buying airplanes with efficient designs to provide airline operators with higher fuel efficiency. Furthermore, there has been a considerable rise in air travel, which is likely to lead to the growth of the airline sector and, subsequently, an increase in the procurement of laser cutting machines. Global commercial airlines’ revenue was pegged at around USD 812 billion in 2018. The International Air Transport Association (IATA) forecasts this figure to reach as high as USD 872 billion in 2020.
The medical segment is anticipated to register the highest growth rate. In the medical industry, all manufactured products must meet the highest quality standards and tight dimensional tolerances, which is why laser cutting is a widely accepted method in this field as it provides high quality, hygienic and clean surface, and germ-free and residue-free final products. Fiber lasers are extensively used in the manufacturing of stents, heart valves, needle profiling, and other medical devices.
On the other hand, industrial machinery is likely to emerge as the largest end-user in the global laser cutting machinery market. It holds the highest share in the total consumption of laser cutting machines across the globe, which can be attributed to the rapid pace of industrialization, especially in emerging economies such as Brazil, India, China, and Thailand.
Asia-Pacific is expected to be the largest consumer of laser cutting machines throughout the forecast period. Europe is one of the key producers of laser cutting machines, and China is among the key importers of laser cutting machines from Europe. However, the economy’s singular focus on establishing itself as a global manufacturing powerhouse and stability of initiatives in the country due to its single-party rule mark China, and with it, Asia Pacific, as one of the largest producers and exporters of laser cutting machines.
India is expected to emerge as one of the market leaders with the highest CAGR. The country is the biggest consumer and exporter of jewelry and gem products. In jewelry exports, India accounted for about 15%, i.e. USD 54 billion, of global jewelry export. As per the India Brand Equity Foundation, the market for gems and jewelry is expected to reach a value of USD 100 billion by 2025. This highlights the immense potential for laser cutting machines used in the gems and jewelry industry.
The use of laser cutting machines in robotics is projected to place Japan as one of the global leaders in the consumption of laser cutting machine tools. Japan is a leading manufacturer of robots, which find applications in industries for handling, welding, painting, and cutting, among others. Smart robots are made of complex and small components that require the highest precision and reliability. Laser cutting machines find use in the manufacturing of these components.
China is at the forefront of technological developments in Asia-Pacific. The country’s automobile manufacturing industry has recorded strong growth in the past few years, backed by favorable government policies and incentives. China has been witnessing a considerable surge in vehicle ownership. As per the China Association of Automobile Manufacturers, over 27 million vehicles were sold, and about USD 7 billion was recovered from exporting vehicles in 2018.
Some of the key players profiled in this market include TRUMPF, Han’s Laser Technology Industry Group Co., Ltd, Bystronic Laser AG, Yamazaki Mazak Corporation, Wuhan HGLaser Engineering Co,.Ltd., DMG MORI CO., LTD., LVD Company nv., Cincinnati Incorporated, Universal Laser Systems Inc., NISSAN TANAKA CORPORATION, Penta-Chutian Laser (Wuhan) Co., Ltd, IPG Photonics Corporation, Lead Laser, Epilog Laser, CTR Lasers, Spartanics, WUHAN HE LASER ENGINEERING CO., LTD., Wuhan Golden Laser Co., Ltd., Trotec Laser GmbH, BOYE LASER APPLIED TECHNOLOGY CO., LTD, Wuhan Tianqi Laser Equipment Manufacturing CO. Ltd, OREE LASER, BODOR, Foshan Beyond Laser Technology Co., Ltd (HSG LASER), Gweike Tech Co., Ltd., Coherent Inc., Prima Industries Inc., Mitsubishi Electric Corporation, Amada Holdings Co. Ltd., and Koike Aronson, Inc.
Players are observed to be adopting strategies such as acquisition and expansion to increase their market share. For instance, in July 2018, Amada Holdings Co., Ltd. acquired Wisconsin-based Marvel Manufacturing, Inc., a U.S.-based metal cutting machine manufacturer. In another instance, Mitsubishi Electric, in October 2019, announced the launch of a new plant in Gujarat to establish its geographical footprint in India.