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Taiwan Machine Tools | December 12, 2017

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Taiwan’s rich metalworking supply chain makes a great local machine tool maker in the world market

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Written by Cheng Lin

Taiwan manufacturers have successfully captured a certain group in the consumer market through the high C/P value and flexible service support. Though it is said that the market in Taiwan is too small to support the domestic industry, this situation in fact boosts the local manufacturers’ machine tool skills to perform better in the international market, after all they started their business as an international company.

As the time pass by, producers in Taiwan’s machine tool supply chain formed a deal to cooperate and strive towards success at the same time, in a very dynamic manufacturing environment.

Together these domestic suppliers constitute economies of scale which makes German and Japanese competitors in the middle class market unable to compete with Taiwanese machines regarding the cost. Meanwhile, manufacturers in the emerging markets also cannot rival to the steady performances of Taiwanese products.

This C/P value advantage is not achieved by only one manufacturer, but rather, it is achieved by the whole group of the metalworking chain in Taiwan. This method is well-regarded by many, but can never be imitated since only the central part of Taiwan is organized with thousands of factories. These small and medium enterprises manufacture tens of thousands of products per day to cope with order requests all over the world. A company we interviewed is one of the many companies located at the core of the supply chain, and is a pro in developing the system to build world class five-axis machine centers. The company only designs and assembles, while it outsources the rest of the production process.

The debut

The company was established in 1997 by a group of engineers with mechanical backgrounds. The founders have pursued quality throughout the years, no matter how difficult it can be. Now there are 60 employees and 12 of them are from the R&D department, all are experts in guide rails and linear guides. In order to respond to the demand from Chinese buyers, the company established an operational center in Zhejiang Province, which operates selling, service and distribution.

Taiwan Headquarters

Aside from operations in Taiwan and China, the company also exports to Turkey, Malaysia, and the U.S. as its machines match to the demands from manufacturers in these places. “In Turkey and Malaysia, buyers are mostly from mold industry, automotive sector, and 3C. While in the States our products are adopted by the supplier chain of an international aircraft company. Another case in the States is that our machine centers are utilized to process fighter aircrafts by the suppliers," said General Manager Margaret Chuang.

100% Made in Taiwan

GM Chuang coordinates with the Taiwan metalworking supply chain to finish all the production procedures but not the control system, this was done before it acquired the services of a local maker. She explained the machine tool controllers are the seller’s market, and this critical technology is controlled by foreign suppliers. Buying a foreign-made controller is handled by the buyer. Therefore this situation has influenced the development of Taiwan machine tools.

In order to gain independence on this issue, GM Chuang works with one Taiwanese controller supplier, to develop the best system to maximize the machines’ full potential. Chuang shared, “The local supplier is unlike foreign makers where everything is fixed. Rather, they can adjust the program based on our customers’ processing demands, and this never happened before when we purchase expensive foreign controllers. Now their controller is installed into our five-axis machine centers, and the cooperation project go well.”

Furthermore, the company also works with domestic research institutes to advance its technology and management that helps to create added value to its products and services. In looking forward to the future, Chuang claimed that the company will extend the MIT (Made in Taiwan) percentage, and sell high-quality machine tools in the world market.