Engines, Semiconductors Drive Investment in U.S. Heavy Manufacturing

The U.S. heavy manufacturing sector is getting a shot in the arm from the rising demand for engine and transport equipment, particularly those that conform to the latest guidelines on emission reductions. Other newsworthy markets, such as semiconductor and battery-storage systems, are driving investment. Industrial Info is tracking nearly $4 billion worth of heavy-manufacturing projects across the U.S. that are set to begin construction in the third quarter, with projects for internal combustion engines and aircraft accounting for nearly half of the total.

Engines for vehicles, aircraft and other transportation always account for a significant share of spending in the heavy-manufacturing sector, and General Motors Company (NYSE:GM) (GM) (Detroit, Michigan) leads the way with its proposed expansion of the Duramax diesel engine-production complex in Brookville, Ohio. The automaker plans to add 1.1 million square feet of space to the existing, 251,000-square-foot plant, in response to strong demand for the engines used in Chevrolet and GMC heavy and medium-duty pickups.

But the Brookville expansion likely will come a cost: According to Dayton Daily News, GM's original Duramax engine plant in Moraine, Ohio, will see much of its workforce moved to the Brookville plant following its completion, and eventually could face closure. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can learn more from a detailed report on the Brookville expansion and a related plant profile, and can read a profile of the Moraine plant.

Cummins Incorporated (NYSE:CMI) (Columbus, Indiana) is developing one of its own engine plants for a different purpose. The iconic manufacturer is planning $452 million in upgrades to its Jamestown Engine Plant in Lakewood, New York, to produce a 15-liter, fuel-agnostic engine, which the company first announced at last year's ACT Expo. The new model will be able to use diesel, hydrogen or both, and will keep the plant competitive in a changing market while meeting emission regulations from the U.S. Environmental Protection Agency (EPA), Cummins said in a statement. Subscribers can learn more from Industrial Info's project report.

Cummins expects demand for oil and gas engines will increase by 15% to 25% for full-year 2023, driven by increased demand in North America. But Jennifer Rumsey, the chief executive officer of Cummins, was optimistic about newer technologies in the company's most recent quarterly earnings-related conference call: "We do believe that there's continued opportunity in the engine space--with future EPA regulations of the ultra-low NOx build rule--to increase our position in the market, although we have a strong position today in the U.S. market. So, content expansion."

Semiconductors have been a hot topic in the markets for the past few years, and Applied Materials Incorporated (NASDAQ:AMAT) (Santa Clara, California) is seizing the opportunity to increase its production of the machines that craft the heavily demanded electronics component. The company is adding equipment and renovating existing space at its semiconductor-machine plant in Austin, Texas. Subscribers can read detailed reports on the new equipment and renovations.

"Looking beyond 2023, our long-term growth thesis for the industry remains unchanged. Semiconductors are the foundation of the digital economy, which is driving demand and puts the industry on a path to become a $1 trillion market by the end of the decade," said Gary Dickerson, the chief executive officer of Applied Materials, in a recent earnings call. He pointed out how the demand for machines to make semiconductor chips could rival that of the chips themselves: "Increasing complexity means that wafer [fabrication] equipment can grow at a higher rate than semiconductor revenues--and then, within equipment spending, major technology inflections are increasingly enabled by materials engineering, expanding the available market for Applied Materials."

Household comforts also are seeing some capacity additions. Sub-Zero Group Incorporated (Madison, Wisconsin), which manufactures luxury kitchen appliances, is preparing to begin construction on a $140.6 million refrigeration and related appliance plant in Cedar Rapids, Iowa, one year after the Iowa Economic Development Authority unanimously approved a financial incentive package. The company expects to finish construction by August 2025. Subscribers can learn more from Industrial Info's project report.

Subscribers to Industrial Info's GMI project and plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of reports for heavy-manufacturing projects across the U.S. that are set to begin construction in the third quarter.