Review and Prospect of Taiwan Machine Tool Industry

A country's industrial competitiveness can be evaluated based on the country's machine tool industry technology and output value capabilities.

Although today's electronic information industry is rapidly developing, it cannot completely replace machinery. After all, the real working components are the moving mechanism or supporting structure. Most of the parts of these mechanisms directly or indirectly require machine tools to process and form, the control unit is added to become a finished product for consumers, which covers not only the automobile industry for daily use, but high-tech defense/aviation industry, but also production molds for plastic and glass products, production equipment for electronic components, etc. Over the years, in Germany and Japan, the total share of machine tool output value is nearly 50%.

Machine tools are divided into two categories according to their processing patterns. One is "cutting machine tools" that remove material and form a square. Including comprehensive processing machines, lathes, grinders, electrical discharge machines, drilling machines, milling machines, boring machines, sawing machines, planers, gear cutting machines, etc. The other type is a forming tool machine that deforms or truncates materials by applying shear pressure, Including a punching machine, shearing machine, forging machine, punching machine, wire processing machine, etc. In terms of market share of output value, in different countries in the world, generally speaking, cutting tool machines account for about 75%, and forming tool machines account for about 25%. If it is distinguished by the control method, the use of digital signals and computer operations to control the machine tool is a computer numerical control machine tool (CNC machine tool). Otherwise, it is a non-NC machine tool or a traditional machine tool.

The development and evolution of Taiwan's machine tool industry:

Industry evolution history:

1. Exploring period: From the recovery of Taiwan to before 1960, the maintenance of existing machines was used to accumulate experience. Although there were some small factories to trial the production of machine tools in the later period, most of them were used for domestic sales. The accuracy and reliability of the products were in the start-up stage.
2. Inception period: Before 1961~1970, some machine tool factories had reached a certain scale, not only accepting foreign orders, but the overall export ratio gradually increased. In the later stage, the total output value exceeded NT$400 million, and the export ratio exceeded 50%.
3. Early stage of NC transformation: Before 1971~1980, including some textile machinery factories invested in the machine tool industry, the output value increased significantly, with a total output value of more than NT$8 billion, and large-scale manufacturers also began to develop NC models.
4. NC maturity period: Before 1981~1990, manufacturers invested in the development of NC machine tools one after another. With the assistance of corporate research institutions, NC technology became more popular and mature, and the output value grew to NT$25 billion.
5. Physical test period: Before 1991~2000, due to the prosperity of the machine tool industry, the joining of new manufacturers, and the expansion of the original manufacturers, the output value in 1996 exceeded NT$50 billion. Due to the 1997 Southeast Asian financial turmoil and various factories The strategy of price-cutting competition to win the market has caused many large factories to experience financial crisis, even bankruptcy or mergers, and acquisitions, and the total output value has fluctuated.
6. Turnaround period: From 2001 to 2005, due to the gradual recovery of the international market demand, Taiwan's machine tool industry was once again activated, and the output value in 2005 was about NT$109.3 billion.

The evolution of machine tool industry technology:
Before 1970, Taiwan's machine tool technology still lacked industrial standards and quality control. The performance of the products was low, the quality was also unstable, and the products were limited to traditional machine tools. Later, due to the government's support for a series of precision machine tool development plans, technical cooperation with well-known foreign machine tool factories, and sending personnel to foreign countries for training, as well as the research and development of some large domestic manufacturers, the independent design ability of Yannei gradually established. In addition, manufacturing technology, precision transmission system design and manufacturing, numerical control application and maintenance, precision testing, quality assurance system and other technologies have made great progress. Before 1980, some Taiwanese manufacturers successfully launched CNC lathes, CNC milling machines, CNC integrated processing machines, and CNC grinding machines.

Since 1980, the technology of standard general-purpose CNC machine tools has gradually matured. In addition, third-world countries and China have become more common in traditional machine tools, resulting in a decline in selling prices and compression of profits and living space, making Taiwan's domestic machine tools NC gradually increase. The Mechanics Institute of the French Industrial Research Institute is also making every effort to pave the way for the research and development of machine tools, including inclined bed CNC lathes, horizontal, vertical, five-sided, door-type comprehensive processing machines, and external, internal, and plane CNC grinding machines.

Threats to the development of Taiwan's machine tool industry:

• Most of them are small and medium-sized enterprises, and the magnetic attraction effect of talents in the domestic 3C, semiconductor, and optoelectronic industries makes the R&D energy insufficient.
• The domestic demand market is too small, such as the automobile industry, aerospace industry, etc., and lack of development support for the establishment of system integration and application.
• In the face of the mergers and acquisitions trend of global giants, the cost competitiveness of super giants' new product R&D capabilities and market share increases, especially the Korean machine tools with high homogeneity of Taiwanese products, a direct threat To Taiwan's machine tool industry development.
• Relying on imports of key components, not only the cost remains high, but when the economy is prosperous, shortages often occur, which hinders the growth space.
• The enthusiasm for the development of machine tools in the official, academic, and research circles has gradually receded, the think tank resources available to the industry are becoming less and less, and the demand for talents cannot be connected with the school.

Advantages of Taiwan's machine tool industry:

• Adhere to appropriate profits and support the rollout of new products to achieve sustainable development: In the past, the machine tool industry experienced a painful experience of price-cutting competition, which severely reduced the profit by only 1-20%. Some manufacturers were stunned to grab orders, and cautious companies were also burdened by the reduction of orders and profits, resulting in some If the company loses money or goes bankrupt, without profit, it will squeeze R&D funds. Without continuous R&D activities, it will be impossible to upgrade the grade of products. Not only Taiwan cannot escape the vicious competition cycle of low-priced and homogeneous products but will face An existential threat to emerging countries such as China. Only by investing more R&D funds and actively developing new products with higher efficiency, high reliability, high precision, high compounding, and high intelligence, to increase the added value and profit, is the way out for development.
• Cautious layout in China, the market is very risky and very high: According to the customs statistics report: In the first half of 2005, about 40% of Taiwan's machine tools were exported to China, plus the machine tool merchants who set up factories in China. Since China and Taiwan are of the same language and species, and the cost of labor, materials, and land is cheap, it is easy to attract the layout of machine tool factories, and even affect downstream third-party manufacturers. But also because of the establishment of factories in China, China's machine tool technology has been indirectly achieved, the progress of China's machine tool industry has been accelerated, and the time course and degree of competition between China and Taiwan have been shortened.
• Seriously facing the threat of global mergers and acquisitions: Compared with many big manufacturers in the world, Taiwan machine tool manufacturers have a relatively small scale of operation. Although the advantages are fast inversion and high flexibility, they are disadvantageous in terms of research and development resources, economic production, and product rigor, resulting in product standards and profits. It is difficult to improve. In the past, the advantages of large manufacturers occurred in advanced countries such as Germany, Japan, and the United States. Even if they merged into super-large manufacturers, the impact on Taiwan would not be immediately obvious, but if they were born on competitors of the same level as our products, the impact would be immediate. Taiwan thought about the response early, including the standardization of domestic components to reduce costs, mutual shareholding or strategic alliances between companies, and even mergers to increase the division of labor in design and development or use of joint procurement to reduce cost efficiency.
• Call on the government to provide more incentives and assistance, and manufacturers to make good use of government resources: Compared with the high-tech industry, the government provides relatively few incentives to the machine tool industry, and even the number of national defense R&D personnel is small. However, the machine tool industry is a precision machine that can represent the country's industrial level, and its industrial relevance. It is large, with mature development and stable profits. The annual output value reaches NT$100 billion, and exports account for 75%. It earns a lot of foreign exchange for Taiwan. Therefore, I call on the government to invest in the machine tool industry with such a high return on investment. More incentives and assistance. Manufacturers should make full use of the R&D subsidies provided by the government and the high-efficiency and low-cost think tanks of R&D units to continuously develop new and more competitive products.

​Reference: tami