The Secret to the Growth of the Taiwan Machine Tool Industry
Industry Clusters for the Taiwan Machine Tool and Component Industry
“Machine tools” are financial assets, but are also the foundations of all manufacturing industries. Providing services to global manufacturing industries that deliver high rates of return on investment is the mission of Taiwan’s machine tool and component industry. The ability of Taiwan’s machine tools industry to compete with other countries without the support of a strong car industry or huge domestic demand depends entirely on Taiwan’s flexibility and adaptability. This ability to provide customized services underpins the exceptional competitiveness that is the hallmark of the Taiwan machine tool industry.
Taiwan is home to world-class industry clusters for the machine tool industry. Viewed from the air, there is a swathe of countryside some 60km long and 14km wide that runs along the Dadu Plateau of central Taiwan; this so-called Golden Valley is home to more than one thousand precision machinery manufacturers and upwards of ten thousand downstream suppliers, employing more than 300,000 people with an annual output of $3 billion. It has the highest output value per unit area and the highest density of any machine tool industry cluster in the world.
Without this cluster, Google’s solar farms in the desert would be unable to follow the sun; the top four equipment suppliers for the global semiconductor and display panel industries also use components from here. Without them, the semiconductor and display panel industries would find their supply chains cut. Car components for the German and Italian manufacturers, as well as gears for General Motors, Porsche and Hyundai all come from this industry cluster; even China, the world’s largest car market, principally depends on this Golden Valley of precision machine tools for its mold processing equipment.
The Taiwan machine tools industry is even able meet the numerous and uniquely stringent requirements of Apple, which depends on this industry cluster, and the Taiwan industry’s greater efficiency in comparison with even Japan or Germany, to create its uniquely fashionable products.
Industry clusters + management underpins the value chain of the Taiwan industry
Constant refinement, continual innovation, and continuing to provide customers with outstanding products have always been the goals for which the Taiwan machine tool industry has strived.
Under the guidance of Taiwan’s Corporate Synergy Development Center (CSD), a number of Taiwan-based machine tool companies have pooled their resources to create the M-Team Alliance. M-Team Alliance strives to promote lean production and lean management through mutual observation and join study, in order to raise quality and shorten delivery times throughout the Taiwan machine tool industry, with the aim of adopting a premium brand route to success. The Alliance will leverage the unique features of Taiwan’s Golden Valley to transition away from the past model of individual companies battling alone, in favor of more coordinated efforts to jointly create value, creating a new paradigm for the industry. The resulting focus on systematization, quality and image will allow the world to see the continual progress made by the Taiwan machine tool industry.
Manufacturing + services is the new trend for Taiwan’s manufacturing industries
Service industries have always been strengths of Taiwan, and Taiwan’s machine tool and component manufacturers are also applying Taiwan’s service model to manufacturing industries by providing customized products to meet the varied requirements of their diverse range of clients. They are also continuing to take on the challenge of providing even faster, shorter-distance service models in an effort to expand their global presence and establish new service points, with the goal of providing rapid, high-quality aftersales service to meet the individual requirements of their end clients as closely as possible.