Knowhy Insights · The Era of Machine Tool Breakthroughs

Last week, a major conference on China's industrial machine tool industry concluded in Wuzhen, China.¹

RMB 1.6 trillion

Revenue of China's industrial machine tool industry in 2025, maintaining its position as the world's largest for more than a decade.

+20.5%

Year-on-year growth in new orders for metal-cutting machine tools in the first half of 2026. Orders on hand grew by 19.1%.

At the start of China's 15th Five-Year Plan (2026–2030), industrial machine tools have been designated the top priority in key industrial supply chain initiatives.

Yet amid all the attention, one critical component is rarely mentioned:

Cutting tools.

01 | When the Industry Picks Up, the Cutting Edge Feels It First

A common description in the industry calls cutting tools the **“teeth of industrial machine tools.”**²

Machine tools provide the framework for machining. Cutting tools directly determine cutting quality, cycle time, and cost.

What does rising demand mean on the shop floor?

Higher machine utilization. Longer cutting hours. More frequent tool changes.

As the recovery moves from order books to actual production, the first place to feel the pressure isn't the machine itself. It's the cutting edge.

Yet tool management remains a relatively underdeveloped area in many factories.

Direct tool purchasing costs account for just 3%–5% of production costs.

↓

**When tool selection, inventory, and abnormal tool consumption are included, total tooling-related costs can reach 15%–20% of production costs.**³

02 | In the Race to Overtake, Capacity Starts with the “Teeth”

At the conference, Academician Zhou Ji made a compelling point: by switching to a new technological track, China's industrial machine tool industry has a real opportunity to overtake established leaders.¹

Machine tools may be changing tracks, but tool management is where factories risk falling behind.

The fuller the order book, the more costly unplanned downtime becomes.

The tighter the production schedule, the more dangerous experience-based tool changes can be — leading to tool breakage and scrapped parts.

The more urgent the delivery deadline, the more likely a single tool-related issue is to hold up an entire production line.

During an industry upswing, capacity constraints are not always visible in the number of machines a factory owns. More often, they emerge in the details at the cutting edge:

Is tool life backed by data? Are tool changes based on evidence? Can abnormalities be detected before they cause disruption?

03 | Give Every Machine Tool a Set of “Teeth” You Can Manage

What Knowhy does is turn shop-floor cutting operations into manageable, actionable data.

Knowhy Smart Tool Box — Control tool circulation.

Knowhy Tool Lifespan Management — Make tool changes more precise.

Knowhy SCB Machine Monitoring Device — Monitor machine conditions.

Knowhy Process Agent — Identify the right machining solutions.

Knowhy Tool Management Operations System — Build the data foundation.

With the SCB Machine Monitoring Device, equipment management can move beyond reactive repairs toward predictive maintenance.

As machine tools shift into a higher gear, tool management must shift with them.

Even if you're not planning to expand capacity right now, there's one calculation worth making:

One instance of unplanned downtime costs more than machine hours. It can also put delivery commitments at risk.

The fuller the order book, the more important that calculation becomes.

Knowhy's Takeaway

Market momentum comes from the industry. Production capacity depends on how well you manage it.

Machine tools are changing gears to overtake.
Don't let your production capacity lose its edge at the cutting tool.

Data Sources

¹ The 2026 High-Quality Development Conference for the Industrial Machine Tool Industry Chain was held in Wuzhen on October 13–14, 2026. China's industrial machine tool industry revenue exceeded RMB 1.6 trillion in 2025, maintaining its position as the world's largest for more than a decade. In the first half of 2026, new orders for metal-cutting machine tools increased by 20.5% year on year, while orders on hand rose by 19.1%, according to statistics from the China Machine Tool & Tool Builders' Association. Academician Zhou Ji's remarks on overtaking through a change of technological track were reported by China Industry News on October 16, 2026.

² “The teeth of industrial machine tools” is a commonly used industry expression for cutting tools in sector research and reporting.

³ Tool purchasing costs of 3%–5% and total tooling-related costs of 15%–20%: industry estimates attributed to Sandvik Coromant and Chengdu Tool Research Institute.