Interview Taiwan: Develop into global manufacturing hub
Dr. Walter Yeh, president, Taiwan External Trade Development Council (TAITRA) shares interesting insights on the current machine tool market in Taiwan.
Taiwan’s president Tsai Ing-wen has ambitions to make the country a global manufacturing hub for intelligent machinery and high-end equipment. What are the initiatives undertaken to achieve this goal?
Taiwan is aiming to develop into a global manufacturing hub for intelligent machinery and high-end equipment. The Intelligent Machinery Program is one of Taiwan president Tsai Ing-wen’s five major industrial development objectives. The program aims to strengthen the industry value chain in intelligent manufacturing, products and services through customized production and seize opportunities in the US $5.2 trillion aerospace market.
The central government is working together with the city of Taichung and this has resulted in the establishment of the Smart Machinery Promotion Office. The office which has commenced this year has been given the task of helping manufacturers make a significant breakthrough in processing in order to improve the quality of their machined products. In addition to this, there are also plans to develop demo sites for industrial and research units to conduct simulations of production lines.
Which are the core sectors that the Taiwan machine tool industry is targeting in order to grow?
In the aviation industry, Taiwan has both manufacturing and MRO capabilities and supplies to Airbus, Boeing as well as other global aircraft builders. In 2016, its output totaled US $3.342 billion. With its eyes set on the global aerospace industry, Taiwan has begun developing intelligent machine models capable of processing intricate designs autonomously. Its ultimate goal is to provide a comprehensive aerospace production supply chain. While the aerospace industry is booming, automotive still remains one of the most important industry for the Taiwan machine tools industry.
What is the current export market scenario of the Taiwan machine tool industry?
In 2016, nearly 80% of the total machine tools output was exported to over 138 countries. For instance, export of Taiwan-made machine tools reached US $2.89 billion last year, which made the nation the world’s fifth largest exporter of machine tools. This year, during the January–August period, Taiwan exported machine tools totaling US $2.12 billion, increasing 14.3% from the same period a year ago. Metal cutting machines accounted for US $1.77 billion, increasing by 14.4%, while metal forming machines generated US $358 million, up by 13.5% compared from the same period a year before.
Germany was the fourth largest destination for Taiwan-made machine tools last year, contributing US $109.78 million to Taiwan’s machinery exports. Meanwhile, from January– August this year, Taiwan’s exports to the German market reached US $851.38 million, increasing 21.2% compared with the same period last year, making Germany the third largest export market for Taiwan machinery.
Taiwan also exported machine tools to other major industrial nations, including China, US, Thailand, Vietnam, South Korea, India, and Russia, all of which also posted significant growth.
How is the Taiwan machine tool industry planning to increase its global footprint in the coming years?
In the face of increasing calls in the global market for shortening of production times as well as small quantity and large variety product range it becomes a challenge for today’s manufacturers
to ensure effective distribution and use of various production resources, incorporation of IoT and big data technologies into production. All these technologies allow different units of equipment to communicate with each other, and also ensure flexibility in production processes that will allow adjustments according to the prevailing conditions. All of this can be achieved with smart manufacturing solutions from Taiwan.
Another important factor in shaping Taiwan’s transformation into smart production lies upon the new formation of the aerospace alliance, the A-Team. A forecast conducted by Boeing and Airbus speculates that the global aerospace industry still has another US $5 trillion growth capacity in the next 20 years from now.
The civil aircraft market is another advanced manufacturing chance for the Taiwan machine tool industry. The aerospace producers in Taiwan such as the Aerospace Industrial Development Corp. (AIDC) has signed a memorandum with 14 Taiwan machine tool manufacturers in January 2017. This has provided a new platform for Taiwan machine tool manufacturers to supply high quality machines for producing aerospace parts and products. Therefore, it helps these manufacturers to be recognized as qualified machine producers which also adhere to the strict standards in the aerospace industry. In the Industry 4.0 revolution, Taiwan is never far away from the world’s newest development.
With so much happening in the machine tool sector, Taiwan is surely poised for innovation and growth!