From May 20-24 this year, about 30,000 visitors, including buyers from Asia, Europe and the U.S., flocked to the Commercial Exhibition Center in Taichung City, central Taiwan for the Automatic Machinery and Intelligent Manufacturing Exhibition. The trade show has been staged annually in Taichung for more than three decades, though this marked the first time that intelligent manufacturing was used in the title of the event. Organizer Commercial Times, one of the country’s two major financial newspapers, opted to alter the name of the show to highlight the growing focus on this field in the nation’s globally competitive machinery sector.
“This is the 32nd edition of our machinery show in Taichung. But unlike previous events, this year’s exhibition features intelligent machines to reflect the current trend in manufacturing systems development,” Chen Kuo-wei (陳國瑋), president of Commercial Times, said at the opening ceremony of the five-day event, which generated business deals totaling about NT$300 million (US$9.2 million). “Furthermore, the government plans to turn Taichung into a hub of the smart machinery industry by pooling resources from academia and the public and private sectors.”
Intelligent automation is the integration of hardware, software and technical services to develop systems with sensing, computing and machine-to-machine communication capabilities. These devices are typically safer and more efficient than traditional manufacturing machines. They can also be reprogrammed to perform different tasks, enabling companies to quickly respond to emerging trends and new production requirements.
President Tsai Ing-wen (蔡英文), who assumed office in May, has listed the smart machinery sector among her five major industrial development objectives. According to the proposals outlined by Tsai, her administration intends to bolster the machine tool and intelligent automation industries in and around Taichung by offering support in such areas as international cooperation, land acquisition, marketing, research and development (R&D) and talent recruitment. The government hopes such measures will help foster innovation, boost employment and enhance the nation’s overall international competitiveness.
Mother of All Industries
“The machinery sector is referred to as ‘the mother of all industries’ and is considered an important indicator of a country’s level of industrialization,” said Alex Ko (柯拔希), chairman of the Taipei-based Taiwan Association of Machinery Industry (TAMI). “Over the past 70 years, the local industry has evolved from producing traditional to state-of-the-art machines, focusing first on precision, then automation and now artificial intelligence.”
Currently, Taiwan is home to some 13,000 machinery factories that employ about 470,000 people. Many of these facilities are located in the so-called Golden Valley, an area spanning roughly 60 kilometers around the base of Mt. Dadu in Taichung. The region boasts the highest density of machinery plants in the world.
TAMI statistics show the production value of Taiwan’s machinery industry reached approximately NT$950 billion (US$29.2 billion) in 2015 and is projected to register an annual growth rate of about 5 percent this year. Taiwan is the world’s fourth-largest exporter of machine tools, behind Germany, Japan and Italy. It is also among the top 10 exporters of rubber and plastic, textile and woodworking machinery.
The government has long played an active role in the industry. According to Ko, state-supported research organizations—including the Industrial Technology Research Institute (ITRI) in Hsinchu County, northern Taiwan, Precision Machinery Research and Development Center (PMC) in Taichung and Taipei’s Institute for Information Industry—have helped facilitate rapid and regular technological upgrading, a key factor in the continued growth of the sector.
More recently, the R&D focus has turned to advanced robotics and smart automation. Since the mid-2000s, the government has introduced a range of financial assistance schemes to promote the development of cutting-edge robotics technologies. And the Ministry of Economic Affairs (MOEA), for one, has sponsored a host of projects on intelligent automation at ITRI and PMC.
“Innovative technologies developed by these research institutes have helped local companies keep pace with global market trends and identify new product development objectives,” Ko said. “Meanwhile, the excellent quality of locally made machinery has been an important factor in the success of high-tech manufacturing sectors in Taiwan including semiconductors, optoelectronics and green energy.”
The chairman stressed the international competitiveness of Taiwan’s machinery industry is due to the high quality and reliability of its products as well as the diversity of solutions it offers. “The excellent cost-performance ratio of our precision machines is the main reason why they readily attract international buyers and are exported to more than 100 countries,” he said. “Plus, Taiwan manufacturers have the flexibility to facilitate custom or small-volume orders, while their foreign competitors largely focus on the mass production of uniform goods.”
To promote Taiwan-made machinery products, TAMI cooperates with the government-supported Taiwan External Trade Development Council to organize three biennial industry exhibitions—the Taipei International Machine Tool Show, Taipei International Plastics and Rubber Industry Show, and Taipei Manufacturing Technology Show. In addition, using subsidies provided by the MOEA’s Bureau of Foreign Trade, the association arranges for local manufacturers to attend about 50 overseas trade shows each year to help them diversify their export markets.
Ko said the industry can help deliver long-term sustainable growth in Taiwan, noting it uses less water and electricity and produces less pollution than many other large-scale manufacturing sectors. However, since roughly 70 percent of Taiwan’s machinery goods are exported, he emphasized the government must work to address unfavorable conditions in international markets.
Taiwan’s machinery products were traditionally about 30 to 40 percent cheaper than those made in Japan, though the sharp depreciation of the yen in the past several years has offset that price advantage. Furthermore, Taiwan has struggled to participate in the burgeoning global network of free trade agreements and as a result local manufacturers now face higher tariffs than their overseas competitors in some markets. The Tsai administration has stated it aims to address the latter issue by expanding bilateral and multilateral economic cooperation as well as seeking participation in negotiations for the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership.
“We hope the government can respond to the currency depreciation policies launched by Taiwan’s main rivals, as well as strive to join regional trade pacts like the TPP. These actions are necessary if the nation is to compete on a level playing field,” Ko said.
Looking ahead, the TAMI chairman said Taiwan is well placed to develop innovative products for the fourth industrial revolution, also dubbed Industry 4.0, an impending era of digitally connected manufacturing that will see technologies such as artificial intelligence, big data management, smart automation and the Internet of Things incorporated into production processes.
“Success in Industry 4.0 will require expertise in sophisticated machinery development and information and communications technology, two fields that are among Taiwan’s greatest strengths,” he said, adding “Taiwan companies are better positioned to create intelligent cyber-physical systems” than their German and Japanese counterparts.
TAMI has been vigorously promoting smart machinery by holding forums to keep manufacturers abreast of the latest technologies. The association has also established a committee consisting of representatives from industry, research institutes and universities to guide the development of intelligent machines. “Our collaborative efforts aim to equip young talents with the skill sets and competencies required to succeed in the Industry 4.0 era,” the chairman said.
Ricky Sun (孫金柱), director of the Intelligent Machinery Technology Division at the Taichung-based Machine Tools Technology Center under ITRI, said the high levels of efficiency provided by Taiwan’s extensive machinery supply chain offer local firms a great advantage in the burgeoning smart automation sector. “ITRI has already invested considerable resources in the R&D of industrial robots and related software with the goal of helping domestic companies produce high-speed, high-precision manufacturing devices,” he added.
To date, the applied research organization has succeeded in developing several varieties of advanced robotics systems, including delta robots, which consist of three arms connected to a single end effector and are used in precision manufacturing; Selective Compliance Assembly Robot Arm machines, which mimic the functions of a human arm; and six-axis articulated robots, which can reach almost any point within their work envelope. Furthermore, as local firms must currently import key parts like controllers and sensors, the institute is focusing on producing advanced robotics components.
Controllers function like the brain of a smart machine, monitoring inputs and outputs and making logic-based decisions. ITRI has produced a series of increasingly advanced computer numerical control (CNC) controllers, and recently developed multi-axis motion controllers that feature built-in central processing units, wireless Internet connectivity and user interfaces.
The institute has already transferred CNC controllers and robotics technologies to more than 20 local firms, including Advantech-LNC Technology Co., Delta Electronics and Hiwin Technologies Corp. It also offers consulting, matchmaking and networking services to help local companies cultivate business opportunities and bolster their product development.
“Advanced countries the world over are exploring Industry 4.0 technologies in an effort to tackle labor shortages, boost productivity and conserve energy, so it’s great to see our government has incorporated smart machinery into its national development plans,” Ko said. “Through close collaboration between industry, academia and the government, Taiwan manufacturers will be able to seize the value-creation and growth opportunities offered by smart machines and gain a strong foothold in this emerging global market.”
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