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2023

Malaysia Tooling Market

Malaysia Tooling Market Size, Share, Competitive Landscape and Trend Analysis Report by Product Type (Dies and Molds, Forging, Jigs and Fixtures, Machine tools, and Gauges), End User (Automotive, Electronics and Electrical, Aerospace, Marine and Defence, Plastics, Construction and Mining, and Others): Opportunity Analysis And Industry Forecast, 2023-2032

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Author's: Ajitesh Gupta | Sonia Mutreja
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The Malaysia Tooling Market size was valued at $2,619.27 million in 2020 and is projected to reach $5,260.55million by 2032, registering a CAGR of 6.1% from 2023 to 2032. Tooling is the process of designing and manufacturing tools, which include jigs & fixtures, as well as molds, dies, and various others used in many industries for shaping, cutting, as well as forming materials like metal, plastic, or wood. These tools are crucial in the production of components and parts in manufacturing processes. Tooling can involve the creation of specialized equipment or instruments tailored to specific tasks, contributing to the efficiency and precision of production processes in industries like automotive, aerospace, and electronics. 

“The Malaysia tooling market is anticipated to grow with a considerable CAGR in the coming decade, owing to increase ind industrialization in the country. However, the market is negatively impacted by the economic downturn triggered by the war in Ukraine and the impact of the coronavirus pandemic.”

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Market Dynamics

Every manufacturing business relies on tooling or tools in some way. Molding, punching, forging, machining, boring, drilling, and gauging are all part of the tooling process. Consumer demand for electronics & electrical components and devices is anticipated to enhance the growth of the tooling industry in Malaysia. The mass production of electrical products involves tooling such as drilling, milling, grinding, broaching, and others. In recent years, the number of electronic and electrical gadgets such as televisions, laptops, washing machines, refrigerators, and other smart and conventional consumer appliances in households can be witnessed as a result of the digitization trend. Moreover, Malaysia is a major electronics and semiconductor manufacturing hub in Asia-Pacific. The value rose by 35.3%, going from $5.7 billion in 2011 to US$7.8 billion in 2021.

Telecommunication equipment encompasses various hardware like routers, cables, and mobile devices. In addition, in 2022, Ericson, started manufacturing and distributing 5G telecom equipment in the country, making it the 5G hub for Asia-Pacific. Furthermore, the trade war between China and the U.S. which has sidelined the Chinese electronics industry is driving the electronics and telecommunication industry of Malaysia. Malaysia, as a country, offers a good infrastructure, a skilled workforce, governmental incentives, and other benefits to companies that want to set up their plants in the country, eventually driving up the industrial sector. This has eventually led to a rapid and high inflow of foreign investment in the country. For example, foreign sources account for about 98.8% of the total investments in electronics manufacturing in 2021. Such developments have enabled the electronics industry to export significant electronic components to the world, nearly 40% of the country’s total exports.

Moreover, the automotive sector in Malaysia is growing with a rapid pace. For example, the Malaysian Automotive Association (MAA) is expected to grow positively, with few ups and downs in the coming decade. The automotive sector is a big consumer of tooling, accounting for around 70% of tooling consumption. Automobile production needs a number of specifically designed parts that are subsequently put together to form a vehicle. Car designs are always changing and updating in today's world to satisfy customer requirements and environmental standards. As a result, tool makers must stay up with the industry's continuous developments. As a result, tool producers must keep up with product modifications on a regular basis.

Toolmakers, for example, have traditionally designed a single tool capable of manufacturing around 400,000 components for the same automobile type. In the present climate, however, the automobile industry is focused on customized car models. Hence, this need for product modifications cannot be met with a single instrument. This necessitates tool makers producing 5-6 tools to stamp about 100,000 pieces. With rise in customer demands, tooling makers are being forced to employ bespoke parts and reduce manufacturing time to offer tools at a lower cost without sacrificing tool efficiency. Furthermore, few companies are developing automated assembly lines for the growing demands of defense forces.

However, fluctuations in foreign currencies influence the profit margins of tool manufacturers; thereby having a positive impact on the malaysia tooling market growth. Tools are generally made up of alloy steel, stainless steel, and other metals. Price of steel often fluctuates, owing to different government taxes and demand and supply. In addition, fluctuations in foreign currencies affect the price of steel, which impacts the profit margin of suppliers. For instance, China is the major exporter of steel to Malaysia, and it has been experiencing a major fluctuation in the prices of the steel, and is expected to witness the same in the coming years. According to the latest monthly report of the China Iron & Steel Association (CISA), published in October 2023, China's steel prices are expected to fluctuate further during the foreseeable future. Such factors are expected to restrain the growth of the tooling market during the forecast period.

Moreover, as outlined in a 2019 article by NAI Group, the machine tool industry is undergoing significant changes due to advancements in both hardware and software. Future trends are expected to center around these developments, with a particular emphasis on automation, leading to increased demand for tooling, especially in the automotive and other sectors. Rise of IoT (Internet of Things) technologies has prompted tooling manufacturers to invest more in upgrading their manufacturing tools. The integration of IoT in tool manufacturing offers various benefits, including enhanced production processes, increased productivity, supply chain regulation, and reduced resource consumption and waste during manufacturing. As technology continues to progress, smart machine tools and robotics are poised to take on more responsibilities in industrial settings, contributing to the growth of the tooling market. Automated machine tools, especially in tasks deemed too risky for humans, are expected to become more prevalent. The combination of automation and IoT presents promising growth prospects for the tooling industry in the forecast period. 

The Malaysia tooling market share witnessed challenges in its regular operations due to the COVID-19 pandemic and inflation. Earlier, the global lockdowns resulted in reduced industrial activities, eventually leading to reduced demand for tooling from construction and industrial sectors in Malaysia as well. However, COVID-19 has subsided, and the major manufacturers in 2023 are performing well. Contrarily, rise in global inflation is a new major obstructing factor for the entire industry, and Malaysia is also experiencing its negative impacts. The inflation, which is a direct result of the Ukraine-Russia war and few long-term impacts of the coronavirus pandemic, has introduced volatility in the prices of raw materials used for making tools such as metal, and oil & gas which are the primary energy sources. In addition, inflation is expected to worsen in the coming years, as the possibility of the ending of the war between Ukraine and Russia is less. However, a peace agreement between Ukraine and Russia can be devised, with the continued talks between different countries, which is expected to end the war between them and reduce global inflation. 

Segmental Overview

The Malaysia tooling market forecast is segmented on the basis of product type and end user. By product type, the market is divided into dies and molds, forging, jigs and fixtures, machine tools, and gauges. By end user, the market is categorized automotive, electronics and electrical, aerospace, marine and defense, plastics, construction and mining, and others.

By Product Type:

The Malaysia tooling market is divided into dies and molds, forging, jigs and fixtures, machine tools, and gauges. In 2022, the die & mold segment dominated the Malaysia tooling market, in terms of revenue, and the machine tools segment is expected to grow with a higher CAGR during the forecast period. The tooling market is driven by automation in die casting process, technical advancement in metal processing, and high demand from construction activities. Furthermore, die casting is the most utilized production technique for the manufacturing of important automotive parts such as engines, clutch housings, gear box housings, cylinder barrels, steering components, and others. Such factors drive the growth of the tooling market. In addition, tooling is required for manufacturing of forging components, and parts. Forging is the process of shaping metal with compressive and localized forces provided by press or hammering instruments powered by electricity, hydraulics, or compressed air. A foundry is used to perform the forging process. The major difference between die casting and forging is that in die casting, the metal to be shaped is in a molten condition, but in forging, the metal to be formed is heated to a temperature where its shape changes when force is applied, but the original molecular structure remains intact.

Malaysia Tooling Market
By Product Type
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The Machine Tools segment is projected to grow at a significant CAGR during the forecast period.

By End User:

The Malaysia tooling market is divided into automotive, electronics and electrical, aerospace, marine and defense, plastics, construction and mining, and others. In 2022, the automotive segment dominated the Malaysia tooling market, in terms of revenue, and the electronics and electrical segment is expected to witness growth at a higher CAGR during the forecast period. Tooling is a necessary step in the production of components for automobiles, the aerospace industry, the construction industry, and various others. 

Parts for automobiles, trucks, buses, scooters, trains, and other transportation vehicles are manufactured in the automotive sector. Each part of the vehicle is unique, necessitating the use of a wide range of tools for production. A single automobile contains around 30,000 distinct parts, using roughly half of the equipment used in the production process. In addition, the electronics and electrical industry is one of the fastest-growing industries, owing to the increased consumption of electronics in normal household activities. Due to increase in customer demand, firms are concentrating on producing high-performance and easy-to-use gadgets, which in turn propel the tooling market growth.

Malaysia Tooling Market
By End-user Industry
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The Automotive segment is expected to hold a majority share of the market throughout the study period

Competition Analysis

Competitive analysis and profiles of the major players in the Malaysia tooling market are provided in the report. Major companies in the report include Sandvik AB, Yamazaki Mazak Corporation, LCH Tooling Sdn Bhd, Professional Tools and Dies Sdn. Bhd., Berkshire Hathaway Inc. (Taegutec Ltd.), Pro Tech Tool and Die, H.H. Precision Mould Sdn. Bhd, Excel Mould Manufacturing Sdn. Bhd, Precisetech Sdn Bhd., and Advance Plus Moulds Injections Sdn. Bhd. Major players to remain competitive offer a wide range of tooling and constantly innovate their products. Additionally, services such as molds and die repair and maintenance, and customized tool manufacturing are among the major services offered by the key players.

Key Benefits for Stakeholders

  • The report provides an extensive analysis of the current and emerging Malaysia tooling market trends.
  • In-depth Malaysia tooling market analysis is conducted by constructing market estimations for key market segments between 2022 and 2032. 
  • Extensive analysis of the Malaysia tooling market opportunities is conducted by following key product positioning and monitoring of top competitors within the market framework.
  • A comprehensive analysis of all the regions is provided to determine the prevailing opportunities.
  • The Malaysia tooling market revenue and volume forecast analysis from 2023 to 2032 are included in the report.
  • The key players within the Malaysia tooling industry are profiled in this report and their strategies are analyzed thoroughly, which helps understand the competitive outlook of the Malaysia tooling industry.

Analyst Review

According to the insights of the CXOs of leading companies, the Malaysia tooling market holds a high potential in the automotive industry. A significant revenue is generated from the automotive industry, indicating the concentration of resources towards this segment by many key players. Furthermore, the tooling sector is anticipating a grow due to technological advancements due to the widespread use of automation and IoT in many industrial processes. Also, due to expanding manufacturing units in these industries, sectors such as aerospace, healthcare, plastic molding, and power generation are experiencing rapid growth. Moreover, the government of Malaysia has unveiled various policies to foster the growth of its industrial sector. In addition, the country offers a highly skilled pool of workers in technology sector which among the major reasons for tech giants such as Ericson to set up it 5G manufacturing and distributing facilities in the country. Moreover, the government has unveiled ‘The National 4IR Policy’ which aims to develop Malaysia as a high-tech nation by 2030.

The increased adoption of automation and IoT in the tool manufacturing process is expected to transform the market, as automation procedures help manage and monitor the various manufacturing processes, thereby enhancing the overall quality of the tools produced. Thus, automation in tool manufacturing processes increases productivity and efficiency, which is predicted to boost the overall market growth by increasing the quantity and quality of the production process.

Author Name(s) : Ajitesh Gupta | Sonia Mutreja
Frequently Asked Questions?

Key factors driving the growth of the Malaysia tooling market include an increase in consumption of consumer electronics and electrical devices, growth in focus on product customizations for the automotive products, and growth of the renewable energy industry.

The latest version of the Malaysia tooling market report can be obtained on demand from the website.

The Malaysia tooling market size was valued at $2.6 billion in 2020.

The Malaysia tooling market size is estimated to reach $5.2 billion by 2032, exhibiting a CAGR of 6.1% from 2023 to 2032.

The forecast period considered for the Malaysia tooling market is 2023 to 2032, wherein, 2022 is the base year, 2023 is the estimated year, and 2032 is the forecast year. The market is also analysed historically between 2020 to 2021.

Automotive industries is the largest market for Malaysia tooling market.

Key companies profiled in the Malaysia tooling market report include Sandvik AB, Yamazaki Mazak Corporation, LCH Tooling Sdn Bhd, Professional Tools and Dies Sdn. Bhd., Berkshire Hathaway Inc. (Taegutec Ltd.), Pro Tech Tool and Die, H.H. Precision Mould Sdn. Bhd, Excel Mould Manufacturing Sdn. Bhd, Precisetech Sdn Bhd., and Advance Plus Moulds Injections Sdn. Bhd.

The report contains an exclusive company profile section, where leading companies in the market are profiled. These profiles typically cover company overview, geographical presence, market dominance (in terms of revenue and volume sales), various strategies, and recent developments.

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Malaysia Tooling Market

Opportunity Analysis And Industry Forecast, 2023-2032