Global markets for servo systems – Motion control

The investigation of the motion control markets is based on the IMS Motion Control World 2011. The same organization has also carried out the research where the packaging machinery production in EMEA is investigated. The scope of the industries and markets is limited to GMC and CNC, General motion control products and Computerized Numerical Control. GMC is more relevant to packaging machinery because the global revenues in GMC for packaging machinery are approximately six to seven hundred times bigger than CNC on a global scale.

1.5.1 Global revenues for motion control products

Estimated world revenues for motion control products for the year 2011 were predicted to be just short of 13 Billion U.S dollars with a very high growth rate because of strong recovery from the recession that occurred during 2008 and 2009. The growth rate stabilized back to its normal growth level in 2012. An average annual growth rate for motion control products is forecasted to be 6.2 % from 2008 to 2015 which drives the total motion control revenues up to nearly 18 Billion U.S dollars with more than 22.000 thousand units shipped. The growth rate for motion control products is dependent on machinery production recovery in each sector. The Machine tool sector has been the market booster after economic depression and the sector has a high share in motion control markets representing over 45 % of the total market. [11]

Picture 4. The share of motion control revenues by region. [11]

1.5.2 EMEA

Because of the high number of machine builders, the most substantial area for motion controls has long been EMEA. Despite the depressive years of 2008 and 2009, EMEA still holds the leading position in the motion control market with annual revenues of 3.4 Billion U.S dollars in 2010. Total sales of the motion control products in EMEA for 2011 were predicted to be nearly 4 Billion U.S dollars. However, forecasts for longer periods show that the Asia Pacific area is about to take EMEA’s place as the leading motion control user region. If the forecast holds true, the Asia Pacific region will overtake EMEA in 2014. The recovery from the recession has been difficult due to economic problems in the area. Growth rates are also forecasted to be lower than for other regions with 0,3 % in unit supply and 2.4 % in CAGR revenues up to 2015. [11]

EMEA motion control markets;

33,50%

American motion control markets; 13,90%

Asia Pacific motion control markets; 30,10%

Japanese motion control markets;

22,50%

1.5.3 APAC

The second largest motion control product market area is Asia Pacific with 30.1 % of the market share in 2010. During the recession, China’s economy was able to make positive growth while other countries and continents suffered with negative numbers.

China’s motion control markets grew almost 6.0 % during 2009 and the estimated growth for 2010 was 36.2 %. This means that Asia Pacific has been able to gain over 10 percent of the total motion control markets since 2008 with the help of strong machinery production. This area differs from the others because the demand in equipment technology is lower than it is in the other areas. The equipment does not have to be as flexible and high in performance as in EMEA; but the quality and life cycle are not the qualities to bargain with. Even if requirements on flexibility and performance levels are not high, the quality and expected life span for motion control products, as well as for servo drives and motors should be at the same level as elsewhere. This phenomenon has an effect on both local and international machine builders who are supplying, or just about to enter the area markets. Another important factor in Asia Pacific markets is that China, which is holding the markets for magnets, is one of the growing countries in machine building and is able to control the supply of magnets for the benefit of domestic use. In fact, controlling the supply may increase prices in other areas but in Asia Pacific, prices are more likely to remain at the same level, which sets challenges to international machine builders. The Asia Pacific markets are predicted to rise 15.1 % in revenues and 17.1 % in unit supply from 2008 to 2015.

[11]

1.5.4 America

The American motion control market share was about 13.9 % in 2010 with 1.4 Million U.S dollars. American markets started to recover earlier than the EMEA area with very strong performance in sectors such as packaging and semiconductor equipment. The first nine months of 2011 in machine tool sales showed that the sales increased an

incredible 80 % compared to levels in 2010. But in general the motion control markets are predicted to rise 5.7 % in sales and 2.0 % in units during the period from 2008 to 2015. [11]

1.5.4 Japan

In 2010, Japanese motion control markets took 22.5 % of the total global markets and gained some share back that was lost in 2008 and 2009. If the Asia Pacific markets have their own nature, so has the Japanese market; the markets are totally dominated by local suppliers such as Yaskawa Electric, Mitsubishi Electric, Fanuc, Panasonic and Sanyo Denki. Japanese markets made a strong recovery from the recession and it was reported that the first half of 2011 saw 40 % growth in machine tool orders. The Japanese motion control market predictions show an increase of 3.2 % in revenues and a decrease of 3.0

% in terms of units from 2008 to 2015. [11]

Picture 5. Predicted revenue growths in different regions. [11]

3,20%

Japanese motion control markets Asia Pacific motion control markets EMEA motion control markets American motion control markets

If the growth in the Asia Pacific region was on a level of its own, the same presence can be seen if the variable is changed into supplied units instead of revenues. The negative growth of the Japanese markets suggest that the unit prices are going to rise per piece because if the revenue growth is positive and unit growth negative the result is a higher price per unit. In fact, even if the EMEA and American regions supply growth is positive, the growth is so small that it means that unit prices are going to rise in those regions as well. Asia Pacific unit supply growth is more than 17 % and almost at the same level with the annual revenue growth. [11]

Picture 6. Predicted unit supply growth in different regions. [11]

1.5.6 Fluctuations in motion control

If economic growth was down during the recession in 2008 and 2009, so too was machinery production. The machinery production rate varies enormously depending on the global economic condition, and if we examine the years 2006 and 2007, growth was extremely high. Recovery after the difficult years started in 2010, when the total world output started to grow with 5.1 % average growth and machinery production growth was 17.0 % simultaneously. In the previous year, 2009, machinery production contracted by 18.9 %. The direction of the growth rate of motion control products has

-3,00%

Japanese motion control markets Asia Pacific motion control markets EMEA motion control markets American motion control markets

been similar to the machinery production rate but it oscillates a lot more, making it seem more vulnerable against economic conditions. In picture 7, a short period growth rate comparison between motion control and machinery production is shown. [11]

Picture 7. Growth rate comparison for motion control and machinery production. [11]

One of the main, or even the best feature of the servo motor is that there is no need to execute a magnetic field to start up the motor. It is started with concrete magnets which are mounted inside the motor. If that is a benefit in fast movement and low reaction times in the process, it can be an issue in component purchasing. The magnets which are used in servo motors are manufactured from rare earth minerals, neodymium and dysprosium and the markets are lead by China. The same materials can also be found on other continents but the final price is higher due to legislation which makes the mining of these minerals unprofitable. In fact, China has controlling position in producing this rare material which in turn, has seen an increase in prices but has also prompted other countries to find alternative ways of extracting neodymium. [11]

-30,00%

-20,00%

-10,00%

0,00%

10,00%

20,00%

30,00%

2009 2010 2011

motion control market machinery production

1.5.7 Packaging machinery in motion control

In 2010 the total GMC market was approximately 6.1 Billion U.S dollars together with over 11 Million units and took a market share of almost 56 % of the total motion control market. At the same time CNC motion control markets were smaller in revenues 4.8 Billion U.S dollars and in supplied units 3.8 Million. The much smaller unit supply in CNC is due to higher average unit price. The higher unit price in CNC motion control products is explained by the units used in the machine tool sector, which are very high in the degree of technology. Both GMC and CNC motion control areas are predicted to increase just over 6% yearly from 2008 to 2015. Packaging machinery requires more motion control products than other machinery due to the large number of motion axes in the average packaging machine. Sales of motion control products in packaging machinery were 637,7 Million U.S dollars in 2010, where as the share for GMC was 636,7 and for CNC 1,0 Million U.S dollars. It is remarkable that in total scale the packaging industry represents 6,3 % of the total revenues but under GMC products the share is an impressive 11,0 %. The growth of motion control products in packaging machinery is predicted as 10,7 % CAGR up to 2015. [10] The research shows that the ratio in revenues between the stand-alone and multi-axis solution is approximately 55 % versus 45 % on a global scale in all machinery. The ratio is leaning towards multi-axis solutions according to the predictions, and after a couple of years, the ratio will be 50 % for both solutions. The method of calculation for the single- or multi-axis solution is that a drive is a single axis solution if each encased drive has its own electrical supply.

The definition of a multi-axis solution is that a drive DC bus has to be connected but the power supply can be centralized or decentralized. [12]