Technological change can upend established markets, bringing smaller companies to prominence while giants fall. Just ask Nokia and Ericsson, the Scandinavian companies that once dominated the cell phone market. Richard Chen, chairman of Taiwan-based machine tool manufacturer YCM, says the movement to connect machine tools with computer networks to gain manufacturing insights could be as disruptive as the move from standard cell phones to smart phones – a movement that could carry Taiwan’s tool industry from price-based competition to prominence in the market.
“In the past, Taiwan tool makers focused on jobs shops or Tier 3 and Tier 4 suppliers to industries,” Chen says. “Now, we’re moving toward Tier 1s and original equipment manufacturers (OEMs). At YCM, we’ve developed our connectivity platform internally so we can compete not just on cost but on connectivity, communications, and other features.”
Jimmy C.Y. Chu, chairman of the machine tool conglomerate Fair Friend Group (FFG) – a company whose brands include Feeler, Mag, Pfiffner, and SNK – says Taiwan’s machine tool producers have historically been small businesses, but that is changing with his company and others becoming more aggressive in recent years by purchasing European and Japanese companies. Those purchases, he adds, have accelerated the technological capabilities of many Taiwanese manufacturers, allowing them to better compete globally.
“Industry 4.0 is a great opportunity to expand globally. A lot of people talk about connectivity and Big Data, but no one knows what it’s going to look like, so everyone has a shot at presenting their vision of what future machine tools should be,” Chu says.
With a massive global backlog of unbuilt planes and new technologies making production more difficult, many of the Taiwanese tool companies have targeted aerospace as a growth industry. APEC, a subsidiary of the Tongtai Group, gets about 60% of its revenues from aerospace and hopes to grow that figure, says Lynn Yen, business planning officer.
“Precision and quality are key in aerospace,” Yen says. “You can’t compete in these markets solely on costs, so a strong showing in aerospace is an indication that our equipment truly is world class.”
In Taichung, Taiwan, the island nation’s manufacturing hub, dozens of machine tool producers fill 20 industrial parks. Driving North on the Sun Yat-sen Freeway/National Highway No. 1 from Taichung to the city’s outskirts, billboards advertising rotary tables and IP 67-rated connectors sit alongside advertisements for restaurants. That concentration of expertise has long been a strength for the nation’s tool business says Edward Yang, chairman of the Goodway Machine Tools Group.
“We do most of what we need in-house, but within 30 minutes to an hour, I have access to any material or part or R&D capability,” Yang says.
YCM’s Chen says a key in increasing the technological capabilities of Taiwanese machine tools is to lean on the expertise of another major industry on the island – computer chips. Most of the world’s mother boards use Taiwanese chipsets from Asus, Acer, and others, and the country’s high-tech industry has pushed into cell phones with HTC and others selling globally.
Chen says chipmakers and machine tool companies have not traditionally worked closely with each other, but that’s changing as tool producers seek high-tech monitoring and communications systems.
Femco, a machine tool producer on the southern end of the island, recently worked with a Taiwanese university professor to develop a metrology system to monitor machine performance on its 5-axis machines. That professor’s expertise came entirely from chip production, but those skills applied easily to cutting systems.
“It’s a self-learning system that measures machining information at the controller, compares those results to metrology results, and over time, determines how machining process data affects quality,” says Raymond Lin, deputy manager of Femco international sales and marketing. “The system can adjust machine parameters to compensate for quality, based on those process data results.”
Taiwan’s largest tool makers hope to show their progress on Industry 4.0/Industrial Internet of Things technologies at EMO Hannover in September, with most companies displaying products and FFG reserving an entire hall to house its stable of brands.
Fair Friend Group
Goodway Machine Tool Group