World’s Seventh Largest
Taiwan’s machine tool production amounted to US$3.55 billion in 2013, trailing behind that of Japan, Germany, China, South Korea, United States and Italy. Machine tools form the largest segment of the local machinery industry in terms of dollar value. Most of the machine tools rolled out in local factories are exported to one of the 138 markets overseas.
Taiwan’s machine tool industry characterizes teamwork. Aside from the main metal cutting machine tools and metal forming machine tools, other industry equipment, such as lathes, EDMs, components, cast iron, tool magazine and other products have allied with noted vendors to facilitate supply to the global market. Taiwan’s machine tool industry supply chain, from R&D design to component manufacturing, assembly, testing and marketing, forms a complete system, thus giving the industry an advantage over the competition. Taiwan utilizes its industry-academic liaison well, from the simple plane machining to the complex 3D surface machining. This assures non-stop technical upgrades and transformation towards a more intelligent, high-speed development, and appeals to global customers.
Fourth in Exports
Exports of machine tools set sales record in 2008, putting Taiwan at fourth place behind Germany, Japan and Italy in global rankings. Sales dropped to as low as US$1.7 billion in 2009 amidst the global financial crisis, but rebounded by 65% in 2010 to US$2.9 billion, and further improved by 35% to US$4 billion in 2011. Taiwan’s machine tool industry offers excellent quality and moderate prices. It is unquestionably the preferred partner of many foreign buyers, particularly those from developing countries. Taiwan’s production is better tailored to the needs of international customers. Given the increasing demand from emerging Asian economies, Taiwan’s machine tool exports are expected to increase to US$4.5 billion by 2015, making Taiwan the world’s third largest machine tool exporter.
The Taiwan machine tool industry is facing tough competition from its Italian and Korean counterparts, especially in the mid-end market segment. In an attempt to gain greater market share, Taiwanese producers have been responding swiftly to changing demands. Some take on niche markets through intensive market study and diversified strategies.
Taiwan has also developed significant strengths in the production of machine tool components including castings, cutters, ball screws, linear guides, and so on. Taiwan’s comprehensive supply chain is one of its core strengths. The nation is now capable of producing vital components for use in machine tool assembly. Parts producers who used to supply domestic machine tool assemblers have also succeeded in becoming part of the global supply chains. Currently, Taiwan is the world’s 3rd largest producer and exporter of ball screws with production and export values totaling US$4.99 billion and 3.37 billion, respectively. With the government’s new trillion-dollar initiative underway, the machine tool is primed for growth.
The Taiwanese government has identified precision mechanics as one of the core technologies to be developed in its six-year plan, and pushed for the creation of the Central Taiwan Science Park, which focuses on precision mechanic and aviation technology development. This initiative will lead to new technologies and equipment needed for industry upgrades and to support further growth in the 3C and optoelectronics industries. Its medium- and long-term goals are aimed at supporting biotechnology and nanotechnology development.
Meanwhile, the “2015 Economic Prospects: Industrial Development Package” put forth by the Executive Yuan emphasizes the importance of an industry transformation to create new opportunities. With regards to supporting emerging industries, machine tool producers are devoting much of their R&D efforts to create solutions for optoelectronic, semiconductor, and robotic applications.
Taiwan’s precision mechanics industry has accumulated robust competitiveness in terms of production and R&D, thanks to the government’s relentless support. The combined efforts of the public and private sectors will undoubtedly provide the nation with the much needed boost to accomplish greater efficiency.