Taiwan an island of technology

The machinery industry has been playing a vital role in Taiwan's economic development. It is the country's most important industry by value. Taiwan has evolved from agriculture to high technology, then to a knowledge-based economy after the turn of the 21st century. In the area of high-tech industries, over the past two decades Taiwan has relied on its highly-skilled human resources, large investments in equipment, and the development of high-tech industry clusters possessing speed and flexibility to become an indispensable link in the global high-tech industry system.

The production value of Taiwan's machine tool industry is anticipated to grow by 10%, with a value of US$5.5 billion in 2012 compared from last year's US$5 billion, forecasts the Taiwan
Association of Machinery Industry (TAMI), whose president C.C. Wang also predicts the industry's export value to grow 10% to 15% this year.

The cross-Taiwan Strait economic cooperation framework agreement (ECFA) helped Taiwan's machine-tool industry's export value exceed US$4 billion in 2011, which could make the island
the world's third-largest exporter. In the middle of last year, many domestic machine tool manufacturers were pessimistic toward the industry, but recently said the industry is performing better than expected, as some clients in the electronics sector are beginning to procure production equipment, including machine tools, to boost production.

The early stage of the ECFA allowed seven Taiwan-made machine tools, including CNC horizontal lathes, CNC surface grinding machines, ball screws and linear guideways, shipped to
China at 5% duty, which will go to zero starting this year.

Machine tool exports
Taiwan exported NT$331.11 million (US$11.203 million) of machine tools in January, up 11% from a year earlier (YoY), according to customs-cleared statistics compiled by the Taiwan Machine Tool Foundation (TMTF). Exports of metal cutting machine tools came to US$280.4 million, up 19.6% year-on-year and that for metal-forming machine tools amounted to US$50.73 million, down 20.5%. China and Hong Kong together led as export destination by absorbing US$83.84 million of Taiwan-made machine tools in January, down 26.7% YoY and accounting for 25.3% of the total exports, followed by the U.S. with US$38.81 million, up 86% and commanding 11.7%, and then Thailand with US$23.79 million, up 80.5% and accounting for 7.2%. Other major export destinations, in descending order, were Turkey, Germany, India, Brazil, the Netherlands, Indonesia, South Korea, Malaysia, United Kingdom, Russia, Vietnam, and Japan.

The TMTF's tallies also show Taiwan imported US$49.55 million of machine tools in January, down 15% YoY, of which metal-cutting machine tools came to US$40.9 million, down 21.6% year-on-year and that for metal-forming machine tools amounted to US$8.64 million, up 41.3%. Japan led as import supplier by selling US$28.01 million of products to Taiwan in January, down 23.2% YoY and accounting for 56.5% of the total imports, followed by Germany with US$6.11 million, up 86.2% and commanding 12.3%, then China and Hong Kong with US$5.21 million, up 39.4% and commanding 10.5%.

Machine tool parts, components key export products

Taiwan has built up a strong machine tool industry over a period of more than four decades. With regards to international market competition, Taiwan's products currently compete against Japanese and German technology at higher price levels, while facing low price competition from China at the lower end of the market. In order to overcome these difficulties, Taiwan's machine tool firms must be responsive to the market's needs, use product differentiation strategies, and develop products that fit market niches. In addition, the industry must investigate the needs of ultimate end-users' of its products, predict which markets have growth potential, and develop that machinNike Jordan Super Fly 5