Taiwan's Machinery Industry Enhances its Competitiveness and Deploys Domestic and Overseas Demand for Intelligence

Since 2018~2019, the trade war between the United States and China has been prolonged. Although the growth of Taiwan’s machinery industry has not been as good as before, as the domestic and foreign political and economic situations will settle in 2020, the economy is expected to squat and jump; and this period Cross-field cooperation between the industry, academic and research units, and the information and communications industry is optimistic about the business opportunities of transforming software and SI application services. In the future, it is expected to enhance the dual markets of smart machinery and smart manufacturing, and accelerate the realization of the vision of two trillion yuan in output value by 2025.

Compared with the Western manufacturing industry that has more than 300 years of history since the Industrial 1.0 Revolution in the 18th century, Taiwan’s machinery industry has a relatively low level of experience since the Second World War, but its performance has attracted international attention. It continues to rely on a complete satellite factory system and industry. The settlement, forming a cost-effective advantage, facing multiple international economic cycles, financial crises, and global market competition, and also has the name of a major machinery production and export country. However, looking back since 2008, Taiwan’s machinery industry output value has always remained at 900 billion yuan. In 2016, the central region where the machine tool industry clustered was affected by the monetary easing policies of Europe, the United States, and Japan, and China's follow-up industry 4.0 strategy was under attack. Until the industry uses the policy of promoting the innovation of the smart machinery industry and gradually implements the application of Industry 4.0, it is finally possible to start from the needs of the terminal industry users and drive a new wave of upgrading and transformation needs, and finally successfully broke through the trillion yuan output value mark in 2017.

In particular, in 2019 TIMTOS, HANNOVER MESSE, EMO, and other major machine tool exhibitions at home and abroad, it can be seen that some key component and equipment manufacturers in Taiwan have begun deep integration across fields, integrating domain knowledge of different industries and technical capabilities of academic institutions. Together with information and communication technology, we will jointly drive the dual engines of smart machinery and smart manufacturing. And from the traditional only manufacturing certain types of products to provide complete solutions or business models that "help customers create value", the development of "production solutions" is provided from the perspective of customers, in line with today's flexible production and highly customized Trends such as personalized and personalized products. In the future, it will no longer be possible for Taiwanese manufacturers to break through the output value of one trillion yuan by selling machines in the past 10 years. They must also cooperate with smart manufacturing to achieve the vision of a total output value of two trillion yuan by 2025.

Turning the crisis of the trade war into a turning point

If we infer that 2020 may affect the key to success or failure, it should also be added that Taiwan’s machinery exports account for more than 70%, which are deeply affected by exchange rates and tariffs. For example, Japan and South Korea, which have always been the main competitors in the machinery industry, have benefited from the loose monetary policies of various governments and have let go of depreciation in recent years. The New Taiwan dollar has been relatively strong. Later, when the trade war between the United States and China has spread, the mainland's industries have moved abroad and the RMB Weak and other factors have caused the exchange rate of the New Taiwan dollar to rise and even broke the 29 yuan mark at the beginning of the year, causing the continuous loss of Q1 orders in 2020 that export manufacturers are struggling to negotiate. This may affect the industry to dilute the mainland by taking orders from Europe, America, and Asia. Willingness to reduce the impact of orders.

According to the latest statistics compiled by the Taiwan Machinery Industry Association (TAMI), the export of Taiwan's machinery and equipment decreased in 2019. The export value reached US$27.65 billion, which is negative growth of 7.5% over the same period of the previous year. Exports are priced in New Taiwan dollars. The value reached approximately 855.6 billion yuan, a negative growth of 5.7% over the same period last year. Among them, the total export value of the machine tool industry in 2018 was still 9.5% higher than that in 2017, but it has been negative growth for two consecutive months since November 2018. This shows that most manufacturers have felt that the boom has fallen from a peak in Q4 2018. slide. By the TIMOS period in March 2019, you will be able to feel the uncertainties in the economy, and the crowds at the end of the EMO exhibition will be more obvious. Finally, the total export value of Taiwan's machine tools from January to December 2019 reached US$3.063 billion, approximately A negative growth of 16.2% over the same period last year.

Taiwan’s negotiations with other countries to sign free trade agreements are progressing slowly, and the situation of marginalization is quite serious, which is a difficult predicament to breakthrough. Even the "Cross-Strait Economic Cooperation Framework Agreement (ECFA)" that has been conducive to the export of machinery to the main mainland market in the past 10 years has also faced the mainland customs requiring customs clearance products to be marked "Made in China". It is nowhere in sight. TAMI called on the Taiwan government: "Because Taiwan is still unable to negotiate free trade agreements with major export countries such as Europe, the United States, and ASEAN in the short term, and encountering trade barriers such as tariffs and local investment and production, it may gradually cause orders for machinery products In the crisis of loss, the central bank or financial institutions should at least do their best to save the export competitiveness of the industry in terms of the Taiwan dollar exchange rate policy."

Fortunately, although the US-China trade war seems to have a profound impact on the global and Taiwan machinery industry in the short term, it will drive huge business opportunities in the long run. Although the rigid demand for labor shortages due to the global aging and declining birth rate society has slowed down, and in recent years, it has been seen that some Taiwanese and foreign investors are actively returning to invest, or seeking to transfer orders from overseas second production bases to purchase smart automation equipment, etc. The machinery industry is optimistic that the economy will recover as soon as Q2 of 2020. It is estimated that the export of Taiwan's machinery products in 2020 will grow by 5-10% compared with the same period of the previous year.

The Legislative Yuan also revised some drafts related to investment deductions and defined smart machinery as having to comply with: "The use of huge amounts of data, artificial intelligence, the Internet of Things, robots, lean management, digital management, virtual and real integration, multi-layer manufacturing or sense The intelligent technical elements of the tester allow the equipment to be digitally networked, and have the intelligent functions of production information visualization, fault prediction, accuracy compensation, automatic parameter setting, automatic control, automatic scheduling, application service software, flexible production or mixed-line production "It also emphasizes that it is necessary to install an IoT set-top box (SMB) to achieve production optimization before applying for a deduction, to encourage SMEs to accelerate the introduction of smart machinery, build smart manufacturing capabilities, and increase market share in Taiwan. The applicable period is set from 3 years to 2021. At the same time, with the full commercialization period after 2020, the equipment or products with 5G, and if attached to other equipment, can provide 5G functions, extend to 2022, which will be implemented in early 2019 and apply to 2020 tax returns Until the end of 2021. According to estimates by the Ministry of Economic Affairs, it can drive 400 billion yuan of investment each year in the first three years, and 220 billion yuan in investment in the fourth year, and a total of 1.4 trillion yuan in investment in four years.

Increase the autonomy of the high-tech industry

In the future, the machinery industry will continue to strengthen the global market to expand its sales. If this is used to expand import substitution, it will also be one of the factors that can stimulate the machinery industry to double its output value in 2025! What fewer people know is that although Taiwan is known as a major exporter of machinery and equipment, it is already a country with a trade deficit under the offset of importing a large amount of equipment at the same time. The main source is the increasing proportion of imports of electronic equipment based on national defense. The high-tech industry still has to rely on machinery and equipment to promote growth. Even machine tools that accounted for the largest proportion of machinery exports in the past have been driven by the electronic equipment industry in recent years.

According to customs statistics in 2019, the ranking of some of the main export models of Taiwan’s machinery industry, followed by inspection equipment, has a negative growth of 2.5% over the same period last year; semiconductor, IC, and panel process equipment rank second, with a growth of 2.8%; tools; Machinery products ranked third with a negative growth of 16.2%; transmission components such as bearings, gears, and ball screws ranked fourth with a negative growth of 22.8%; plastic and rubber machinery ranked eighth with a negative growth of 13.7%; machine tools were zero The component category ranked ninth, with a negative growth of 19.0%. However, Taiwan’s machinery imports during the same period amounted to US$34,716.96 million, a year-on-year increase of 30.2%. The main imported machinery was mostly used in optoelectronics, communications, information, and semiconductor high-tech industries, and still ranked among semiconductor, IC, and panel process equipment. First place, accounting for 55.7% of total imports, an increase of 65.5% over the same period last year; engines and components ranked second, accounting for 8.3% of total imports, with a negative growth of 1.6%.

Therefore, if the import amount can be cut by at least half, it can accelerate the machinery industry to reach an output value of 2 trillion yuan. From the perspective, Taiwanese manufacturers still have a lot of room to substitute imports and expand the domestic demand market. Therefore, in the future, both parties must not be like the past, focusing only on machine tools to represent the prosperity of the entire machinery industry, and should also focus on the future needs of the manufacturing industry to keep pace with the times. At present, in addition to the existing industry players taking the initiative to participate in the aerospace A-Team4.0 alliance, there are also 5+2 innovative industry projects such as green energy offshore wind power, electric vehicles, etc., which will help create an opportunity for industry players to train their troops and upgrade their technology. At the same time, it is optimistic that when the semiconductor, panel, circuit board and other industries are developing 5nm~3nm wafers, Mini/Micro LED and other next-generation advanced manufacturing processes in the 5G era, to get rid of the grip of international manufacturers, master key data of domain knowledge and To expand the diversity, we must first master high-tech equipment and increase the willingness to adopt Taiwan-made equipment.

TAMI also recommends that high-tech companies consider working closely with electronic equipment manufacturers to train troops in the future, develop nano smart detection technology in the front-end process, and develop common ultra-precision and energy beam process module key technologies, and expand advanced packaging, Micro LED The application field market will be sold globally; then, I hope to follow the South Korean development of the panel industry model and work closely with the Taiwanese electronics industry. In addition to leveraging the government to promote the improvement of equipment self-manufacture rate, it can also increase the proportion of returning Taiwanese companies using Taiwanese equipment.

In particular, in response to the wide variety of electronic products and the rapid changes in the schedule of replacement, the life cycle is shortened and the process conditions vary greatly. Even the production methods and raw material characteristics of the same product are rich in domain knowledge, which can shape the core technical value of each company, which will affect the yield and quality correlation. All of these have prompted electronic equipment to be often closely integrated with upstream and downstream production processes and environments, with less commonality to meet customer design and manufacturing requirements, and is called "process equipment." And as terminal electronic products pay more and more attention to modularization to save space, and spread their application to automotive electronics, optoelectronic displays, and other fields, as well as the development and manufacturing technology of various types of substrates such as soft and hard boards, ceramics, and SiC. Continuing the advantages of Taiwan's developed electronics foundry industry and improving precision processing capabilities, it will be more likely to develop high-end precision equipment to avoid being grabbed by other countries' supply chains.

For the electronic equipment manufacturing industry, it is necessary to accumulate technology and investment funds for a long time. The development of talents is not easy, and the outflow of technology is a major concern, which can only be achieved by combining group warfare and national team strength. Now TAMI has established the "Open Lab Cross-Field Collaborative R&D and Verification Alliance". It is hoped that through the R&D and production energy of enterprises and research legal persons in their respective fields and laboratories, the smart manufacturing system will connect the production process of products, complete the pre-verification of manufacturing procedures and products, and provide customers with rapid R&D and proofing services; and then build Taiwan Electronics The cross-field collaborative R&D and verification system of product manufacturing, and the cooperation of national forces to develop next-generation products, assist the equipment industry to grasp business opportunities early.

Integrating cloud application software with added value the digital transformation of machine tools

It is also suggested that Taiwan’s machinery industry, which is dominated by small and medium-sized enterprises, should take into account the development of smart machinery and smart manufacturing in the future. It should also follow short, medium and long-term plans to gradually transform into a digital enterprise; including firstly digitalization and lean management, while reviewing Only by finding the entry point for its ability and positioning, and gradually developing its unique value in smart machinery and smart manufacturing, can it drive the rolling growth of performance.

Since 2018, TAMI has been instructing the industry to install Smart Machine Box. It has successfully assisted manufacturers' machines to communicate with robots, sensors, etc. to strengthen the visualization, which is used to collect information on utilization rates and abnormal monitoring, and further connect the machines to international standards. After the Industrial Internet of Things (IIoT), the Taipei TIMTOS, and Taichung AMTS held in 2019, it can also be seen that most of the operators have implemented the networking of existing new and old machines in the short term to further obtain more information and strengthen management. The medium-term goal is also to accelerate the development of public mechanical cloud, on the premise of maintaining a smooth flow of information and information security, so that manufacturers can reduce costs by renting or sharing, and accelerate the introduction or development of related App software to enhance remote services, collection and delivery Production information, provide pre-diagnosis, troubleshooting services, etc. And the long-term goal in the future can help the machinery industry develop industrial-grade sensors through related R&D legal entities, such as the Intelligent Microsystem Center of the Industrial Technology Research Institute, and the Electro-Optical Institute, and analyze the feedback signals of sensors and modules through AI artificial intelligence. ; And then grasp the actual situation of machining, achieve the function of abnormal monitoring, which also helps to greatly improve the processing accuracy and shorten the processing time.

The biggest problems facing the development of AI smart machinery and smart manufacturing in the machinery industry today also include talents and System Integration (SI). Not only does the Machinery Association actively promote the alliance of smart machinery industry, academia, and research, but also urge the engineering departments of universities and colleges to cultivate students with cross-field integration capabilities such as machinery, electronics, information communications, automation, and software; the Ministry of Labor also strengthens the industrial linkage mechanism, Train in-service employees to become multi-functional talents in cross fields, and establish professional and cross-field ability appraisal system. At the same time, it cooperates with public associations and research legal entities to conduct demand surveys of member manufacturers, and pair with software and system manufacturers to negotiate one-on-one in matchmaking meetings. Also, for a large-scale machine tool manufacturer with a higher technical level or a larger scale of intelligent machinery that has developed, considering that it will understand the needs of peers, supply chain manufacturers and customers better than the traditional information communication industry SI, and encourage the company's internal software and management model It develops into a variety of small SI and spreads to various industrial machinery fields, enabling smart manufacturing to be realized earlier.

Looking back at Taiwan’s machinery industry in the 1980s and 1990s, the industrial clusters formed, and smoothly promoted the transition of other manufacturing industries from Industry 2.0 to Industry 3.0; then, using the two-megabit dual-star equipment localization policy promoted in 2000, it successfully upgraded and transformed and entered. High-tech industry; until 2017, riding the wave of international industry 4.0, implementing the short-term strategy of networking of all machines, finally broke the milestone of trillion-yuan output value. However, in 2020, whether they want to survive and break through the trade wars of various countries, or accelerate the realization of the vision of a total output value of two trillion in 2025, machinery manufacturers cannot just sell products like in the past, relying on machine tools, electronic equipment, and textile machinery. Or plastic and rubber processing machines and other single industrial machinery and equipment upgrades. Instead, implement mid- and long-term strategies to give each type of industrial equipment the ability to integrate demand and introduce smart machinery R&D capabilities; and even smart manufacturing for the entire production line, including system service App software and remote connection monitoring, service models such as fault prediction and elimination, diagnosis and prediction, and performance improvement; and then connecting with international standards through the cloud platform can the added value rate of the machinery industry be greatly increased, and the brand image and international competitiveness of "Smart Machinery in Taiwan" can be strengthened.