The Taiwan Hand Tool Industry for the Next Decade
Trend

The Taiwan Hand Tool Industry for the Next Decade

The island's hand tool sector has a centralized industry hub located in central Taiwan, where big-name companies, along with small-and-medium enterprises and subcontractors across upstream and downstream supply chains, co-exist to fulfill the world's hand tool orders. International policies, along with manufacturing advantages, has helped the Taiwan hand tool industry reach sales of NTD$140 billion in 2021. The current trajectory indicates projected continued growth for at least another decade.
Published: Apr 20, 2022
The Taiwan Hand Tool Industry for the Next Decade

The COVID-19 pandemic's disruption on the economy has propelled lesser-known aspects of the global supply chain into mainstream awareness. One aspect has been the soaring demand for Taiwan’s semiconductor chips. While Taiwan is more widely known as the semiconductor hub of the world, equally crucial to keeping the world's economy running are hand tools. The island's hand tools sector is mainly located in central Taiwan, where a diverse network of manufacturers works together to supply hand tools to the world. A single hand tool could go through a dozen manufacturing processes, and be passed along through multiple companies in the area, before returning to the original contractor.

For Stand Tool, a local hand tool designer and manufacturer based in Taichung, Taiwan, representative Brand Hsiao says companies like them are at the forefront of the supply chain disarray, where smaller companies face the brunt of dealing with challenges on multiple fronts. Unlike more prominent companies with the capital to sustain operations through difficult times, SMEs have less of a fallback plan and are more likely to go under during crisis times.

Order volume has increased, yet with rising prices from shipping, delayed orders, raw materials, and such, Hsiao said these circumstances have made it difficult to do business. In addition, backed-up ports worldwide, especially in the U.S., a significant hand tools market for Taiwanese exports, had delayed delivery times in an unprecedented fashion. At the same time, the influx of orders had prompted Hsiao to question the circumstances amid the surge, saying the increase of orders did not reflect the usual peak season. Along with other industry experts cited by local media, he believes the order surge could likely result in a business lull after the influx of demand and further disrupt the usual business operations and predictability in the industry.

In terms of demographic issues, Taiwan's traditional industries face universal challenges similar to their counterparts in Western countries. However, while Western countries rely heavily on imports, manufacturing hubs in Taiwan are facing a shortage of workers, and could eventually lack essential workers to maintain operations. Traditional industries such as hand tools and hardware often have an older, aging workforce, so once they retire, businesses will be hard-pressed to find replacements or find and retain younger workers to pass on the know-how. As a result, companies either need to rely on migrant workers, which have become difficult to obtain due to stricter border restrictions during the pandemic, or bring automation to production and place a greater emphasis on talent retention.

On the other hand, traditional industries like the hand tools industry have seen their talent pool and resources gradually diminished by concentration on specific, popular sectors, where new hires are more likely to flock to. However, this also highlights the difficulties and challenges for the other "less popular industries," such as the hand tools industry, as industry know-how and talent retention are less accessible and achievable.

To bridge the gap, in recent years, Taiwan Hand Tool Manufacturers Association (THTMA) had local companies, benchmark companies, China Steel Corporation, and the government pool combine resources to bring innovation to manufacturing process and produce better quality products. With upstream companies such as China Steel providing quality raw materials, and sub-contractors providing more specialized treatments, such as forging, heat treatment, and electroplating, Taiwanese hand tool companies quickly rolled out medium to high-end OEM products of big-name brands in the U.S. and Europe.

Taiwan's hand tool products are less competitive against Chinese products in terms of prices, but with the global economy entering the third year of the pandemic, circumstances have shed an unflattering light on the pre-pandemic supply chain's just-in-time model. International policies, such as China's strict zero-COVID policies and power shortages in late 2021, have also caused further disruption of the supply chain. There is a need for greener energy and zero-carbon initiatives, which can become a deciding factor for companies deciding whether to do business in the country or not. All are factors and advantages that Taiwan's hand tool industry maintains. THMTA Chairman Huang Hsin-te was quoted by local media Global Views, that Taiwan's hand tools industry value would hit NTD$140 billion for 2021. The current trajectory would ensure continued growth for at least another decade.

Published by Apr 20, 2022 Source :CENS

Further reading

You might also be interested in ...

Headline
Trend
2023 Technology and Data Storage Trend Forecast
The innovative development of technology and storage in 2023, including multi-cloud, will tend to be localized in 2023, cloud service providers will face more transparency requirements, heat-assisted magnetic recording (HAMR) technology will become more popular, etc.
Headline
Trend
Sustainable Fashion and Digital Innovation Trends in the Textile Industry
The digitalization of the textile industry, which is highly connected with the consumer market, is the general trend. In particular, the digitalization of the supply chain such as 3D simulation technology can greatly simplify and speed up the product development and production process, and at the same time achieve the reduction of manpower, which promotes fashion and textiles. Industry players are all vigorously promoting digital transformation, and the recent digital development of the textile industry has mostly focused on issues such as sustainable fashion, circular economy, and digital innovation.
Headline
Trend
What is PCIe? The Features of PCIe 6.0 and the Specifications of PCIe 7.0
PCIe is a standard interface for connecting PC components, such as graphics cards or storage devices, and is used in a wide range of devices, from embedded systems, handheld devices, industrial applications, and servers to supercomputers, etc. For consumers, upgrading the advantage of the later PCIe is that it can support faster memory.
Headline
Trend
Smart IoV System with Seamless Experience - Smart Cockpit
With the rapid development of the automotive industry in smart driving, safety assistance, automotive electronics, and human-machine interface-related technologies, the integration of virtual and real superimposed displays, driver monitoring systems (DMS), interactive functions, Internet of Things (IoT) of the smart cockpit system have become the current trend.
Headline
Trend
Is Green Building A Future Coexists with The Environment, or Is It the Evolution Direction of Contemporary Engineering?
Buildings are the largest consumers of energy in the world. Under the crisis of global warming, the development of "green buildings" is an urgent part of the energy-saving and carbon-reduction consensus of all countries. The main concept of green building is "sustainable development", and each stage needs to conform to the principle of environmental friendliness. The birth of green building is actually closely related to the environmental protection issue that the whole world is paying attention to.
Headline
Trend
The Rise of Fog Computing
Now that cloud computing is popular, the application of Internet of Things is also increasing day by day. However, in terms of architecture, in order to overcome the lack of computing power of connected devices, people have also begun to develop so-called fog computing, which is different from cloud services. And, what is it?
Headline
Trend
The Trend of Unmanned Factories, Industrial Robots Have Become the Foundation of Smart Manufacturing in Various Industries
Even though the future manufacturing and production bases will still be dominated by East Asia, remote work due to the epidemic has broken the geographical constraints. Under the trend of major companies competing for talents, the shortage of manpower in the future manufacturing industry has become the norm. In the future, unmanned factory is the trend to go...
Headline
Trend
Home Health Care Integration Program
With the advent of the era of aging and a declining birth rate, the demand for home medical care is increasing. Connect upstream and downstream medical institutions in series to provide complete patient-centered home medical services.
Headline
Trend
Cement Industry Launches Net Zero Carbon Emissions
With technological progress and industrial restructuring, the cement industry is actively introducing a circular economy and has become an international pioneer in net-zero carbon emissions through alternative fuels, alternative raw materials, waste heat power generation, green power development, and carbon capture technologies.
Headline
Trend
Sustainable Intelligent Manufacturing of Plastic and Rubber Machines
With the rise of global environmental protection awareness, the improvement of process efficiency and pollution reduction of plastic products have become important issues for the rubber and plastic industry. In response to the shortage of workers and the reduction of personnel contact, mechanical automation and cloud services have become the new normal in the industry.
Headline
Trend
Future Development Trends of the Laser Processing Industry
Lasers are used in a wide range of industries, especially in processing. The entire laser processing industry is currently moving in the direction of high power, ultra-short pulse, and intelligence.
Headline
Trend
Overview of Digitally Controlled Incremental Forming Methods for Sheet Metal and Future Market Trends
The shortened product life cycle, low-volume variety, and customization have become mainstream. Quick response and flexible adjustment are the keys to the competitiveness of the manufacturing industry. Rapid trial production has become an international research project to win orders and reduce development risks.
Agree