Japanese and Korean CNC companies are shrinking into high-value-added areas
Traditional CNC machining companies in Japan and South Korea are gradually losing price competitiveness in the field of standard components, as they face cost pressures from China, Vietnam, and Taiwan. The clear trend in 2026 is for Japanese and Korean companies to actively shrink their mid- to low-end businesses and turn to ultra-high-precision spindles, special-purpose machine tools, multi-axis linkage core components, and ultra-precision machining services. For example, Japanese companies focus on micro-machining centers with spindle speeds above 80,000 rpm, while Korean companies focus on key components for automotive molds and semiconductor equipment. This transformation is both a challenge and an opportunity for Chinese CNC service providers: the small and medium-batch, medium-precision requirements (tolerances ±0.01mm to ±0.05mm) that Japanese and Korean companies have abandoned are flowing to China. At the same time, Japanese and Korean companies still dominate the high-end market, especially in the field of ultra-precision machining with precision class ±0.001mm. In 2026, the relationship between Chinese CNC service providers and Japanese and Korean companies will shift from "direct competition" to "complementary cooperation": Chinese factories take on spillover mid-range orders from Japanese and Korean companies, while Japanese and Korean companies provide high-end machine tools and core functional components.
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