China competition impacts revenues of Coherent, IPG and Trumpf

Pricing pressure from China continues to impact the revenues of three major players in materials processing, Coherent, IPG Photonics and Trumpf. Coherent reported a net loss of $3.1m

for its third-quarter results, with revenues down 30 per cent year-on-year to $339m. The company plans to consolidate its high-power fibre laser (HPFL) operations and continue its emphasis on moving its fibre laser focus from cutting to joining and welding applications. A major factor underlying these decisions

comes from increasing pressure from low-cost Chinese competitors that are set to take a larger market share, according to CEO John Ambroseo. ‘In materials processing, headwinds strengthened during the quarter due to a combination of weakening macro demand, continued pressure from tariffs and aggressive discounting in China from domestic and foreign competitors,’ he said. Coherent will now relocate the

manufacturing and engineering of its HPFL products at its Hamburg, Germany, facility to its operation in Tampere, Finland. It will exit a portion of its HPFL business in fiscal year 2020. The actions should save it $24m in annual running costs. The last several quarters have seen Coherent move from fibre cutting applications, Ambroseo told investors, putting greater emphasis on welding and joining, where invention and process IP is still being created. This is largely down to cost competition, he noted, and so the firm is concentrating on areas where it can maintain more realistic pricing. IPG’s revenues decreased 12 per cent

year-on-year, to $364m, as revealed in its second-quarter results. This decrease came as a result of lower sales in cutting and 3D printing applications, the company reported.


“Data points relating to the health of manufacturing economies in our largest regions have weakened”

Sales of its high-power continuous-wave (CW) lasers, representing 59 per cent of total revenue, decreased 20 per cent year- on-year. While sales of its high-power CW lasers – at 10kW or greater – increased 16 per cent year-on-year, sales of other high- power lasers declined. Echoing remarks by Coherent’s Ambroseo, IPG stated this was a result of weaker demand in China and Europe, and lower average selling prices. ‘Data points relating to the health of

manufacturing economies in our largest regions have weakened over the last three months,’ said CEO Dr Valentin Gapontsev. ‘Furthermore, the competitive environment remains challenging, due, in part, to the recent slowdown in industry demand levels. As a result, we expect pricing headwinds related to the competitive environment to

continue,’ he said. Lastly, Trumpf’s annual figures, while

showing an overall increase in sales of around 6 per cent to €3.8bn, reported a decrease in orders of around 3 per cent to €3.7bn. CEO Nicola Leibinger-Kammüller

accredited the decline in order intake to the ongoing trade dispute between China and the US, the economic slowdown in China, uncertainties surrounding Brexit, and to structural changes taking place in the automotive industry. ‘These uncertainties are toxic for investments, and customers, especially the smaller ones, are postponing their purchase of new products as a result,’ she remarked. Only a few business areas, such as EUV or electronics, remain the exception at the moment, according to the Trumpf CEO, with this year’s sales increase being driven by the expansion of the firm’s EUV business, as well as the high level of orders from the previous year.


Vintage Tone/

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