Welding Equipment: Rent or Buy New or Used?

Nearly all of our customers involved in semiconductor manufacturing or research have been affected by the recent downturn in the economy. Good business management dictates that capital expenditures ought to be the first expense to cut in order to keep margins as wide as possible. Yet cutting capital expenditures for many customers means not investing in building capacity for the future, or even cutting capacity during a glut amid what  is sure to be a multi-decade bull market for semiconductor components and technology. Many echoes are heard of a common complaint: a new tube welder is too expensive to justify in light of current order volume and can be easily added if and when order volume justifies the addition.

Yet the savviest competitors understand that waiting until demand rebounds to increase capacity could make them late to the party, their potential feast of a lunch eaten by players who had the foresight or balance sheet to allow them to invest in capacity. For users of welding equipment in the academic or industrial environment, however, increasing capacity and keeping expenses in line need not be be mutually exclusive. Welding equipment can be bought used, re-manufactured, or even rented – all solutions that blunt the impact to the expense column of the income statement.

For manufacturers looking to add permanent capacity, investing in a re-manufactured tube welder will cost more than renting, but will be bring an asset onto the balance sheet that can be quickly depreciated for a high ROI down the road. Vendors that also specialize in repair and re-manufacturing can provide re-manufactured versions of any number of weld heads and other gas equipment.

For producers or researchers not looking to invest in long-term capacity but looking instead to deal with sudden surges in demand or a sudden need for tube welders and other welding equipment and supplies, renting equipment can make a good deal of sense, even though it doesn’t add an asset to the balance sheet. Smaller cash outflows and short-term rentals make it possible for renters to get the most out of their equipment while the getting is good.

Renters of welding equipment of all sorts should rent from reputable sources that maintain and restore all rental equipment. Other sources will often charge a premium since they act as middlemen between renters and rental companies, or they will not have the in-house expertise necessary to service equipment into like-new condition before it is rented out.