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Taiwan Machine Tools | December 12, 2017

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Core Advantages of Taiwan’s Machine Tool Industry

Industrial clusters

Industry clusters first took hold in Taiwan following the establishment of the Taichung Industrial Park, and later replicated in Hsinchu, Central Taiwan and the Southern Taiwan Science Parks. As a result of this success, a number of mechanical industry parks have been planned for Taichung, Fengzhou, Chiayi, and Zhanghua.
This industry cluster is made up of over 1,800 small and medium sized machine tool manufacturers. All are capable of flexible production, individual technical support, and short lead time. As everyone in this cluster works together and lends different specialties, this has created a complete and flexible entity to support global supply chains. The globally unique mechanical characteristic of the industry has a strong international competitive advantage. According to the government’s plans and forecasts, the mechanical industry has been identified as Taiwan’s 3rd largest industry after semiconductors and optoelectronics. Machine tools, industrial machinery, molds, parts and components have all been identified as key segments in the mechanical industry.

Strong Manufacturing Sector

Taiwan has grown rapidly in a number of high-tech segments including IC, IT, communications and opto-electronics. Currently, the local machine tool industry has quickly adjusted to the needs of high-tech industries by offering customized tools such as molds and aluminum/magnesium alloy cutters. To meet the needs of the high-tech industry, high-speed cutting has become the most highly needed feature of future machine tools. If local producers were able to raise their technological standards, they may become the primary source of supply to local high-tech companies and jointly create new opportunities that benefit one another. Overall, the growth of Taiwan’s machine tool industry lies more in the high-tech industry than in the traditional manufacturing sector, allowing producers to explore products with higher margins.
Machine tools are used by producers of many industries to make a virtually endless range of products. Recent technological innovations have given rise to many potential end-user markets, and with it, new opportunities and challenges for Taiwan’s machine tool industry. This report has identified potential growth in the following industries:

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(1) Bicycles: Taiwan is currently the world’s major producer of premium bicycles. In recent years, cycling has been increasingly accepted as an environmentally friendly means of transport. Bicycle producers have sought to expand output capacity by acquiring additional machine tools, making the bicycle industry one of the main sales targets for machine tool producers..

(2) Aviation:Ongoing technological improvements have steered Taiwanese industries more towards the capital and technology-intensive end of the spectrum. The aviation industry, having committed extensive amounts of time and resources to R&D, has finally gained recognition from the world’s major airlines, evident in the growing number of orders. The machine tools used by the aviation industry are mostly planer type milling machines and 5-axis machine centers with CNCs.
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(3) Green Energy: Green energy has prospered ever since Mainland China committed resources to wind power projects, and the EU and USA went ahead with solar power projects. This has given rise to the needs of key components such as gear boxes and bearings for wind power generators, and vacuum chambers for solar power. Both of which are capable of driving machine tool sales, particularly with regards to high speed milling machines, planer type milling machines and 5-axis machine centers with CNCs.

(4) Medical Instruments: The Taiwanese government is committed to developing higher value-adding industries, particularly with medical instruments, as Taiwan’s high-tech background provides a solid entry into electronic instruments and orthopedic materials. Due to the higher quality requirements and complexities involved in producing medical instruments, most producers use 5-axis machine centers and multi-task machine centers in their production.
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(5) Precision Molds:Molding has been commonly referred to as “the mother of all products." Faced with low-cost competition from Mainland China, Taiwan’s molding industry has been shifting focus from large-size molding to higher value, refined and precision molding. From PCs, mobile devices, to other consumer electronics, products have become lighter and smaller than ever, thus giving rise to increasing demands for micro components and precision molding applications.

Some of the technologies that the molding industry is focused on include high-precision mold surface processing; hydraulic tubing molding; deep drawing and high-speed transmission stamping; thin shell and precision injection molding; and continuous panel press forging techniques. Due to stringent demands for 3D curvature, machine tools are increasingly focused on features requiring high speed and high levels of precision, with operating multi-task machine centers.

Based on the emerging markets and machine tool characteristics identified by manufacturers, it is apparent that machine tools will feature higher precision levels and higher speeds with more common multi-axis machine centers and multi-task machine centers use. For domestic machine tool producers, this could present a good opportunity to undergo industry-wide transformation involving new designs for niche markets.

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