WARUM TAIWAN?

Taiwanese Machinery Industry Status,

Cooperation and Market Prospects
for
German and Taiwanese Companies

~ 1~
 Table of Content
■ Taiwanese Business Environment
-Taiwan at a glance
- Geographical Location
- Infrastructure
- Human Capital
- Well Protected IPR
- Financial Advantages
■ Taiwan Machinery Industry
■ Potential Areas of Cooperation

~ 2~
 TAIWAN at a GLANCE
36,190 Square Kilometers
Land (10.3% of Germany)
23.5 million
Population (28.1% of Germany)

2016: 1.50%
Economic Growth 2017: 1.92% (est.)

GDP: 22 th biggest economy

GDP Per Capita Taiwan: $22,530 (rank: 34)
Germany: $41,902 (rank: 17)

Unemployment rate 3.78%

16th biggest trading economy
Total: $510.89 Billion
Foreign Trade Export: $280.32 Billion
Import: $230.57 Billion
3
~ 3~
 GEOGRAPHICAL LOCATION

● Gateway to Asia-
Beijin Pacific
g Seou
3:30 SOUT
H l
KOREA Osak
Toky
o
● Springboard to China
2:20 a
Shangha 3:00
i 1:40

Fly to most major

H.
1:40
K.
TAIWA Asia
N
VIETNA
Pacific cities within
THAILAND
3:30
M
3:00
PHILIPPINE
S 2:00 3 hours
Shipping to major
Asia-Pacific harbors
SINGAPOR
E
4:40 Average: 53 hours

~ 4~
 IFRASTRUCTURE (I)
Well-Managed Industrial Parks

Number of
Science-based Industrial parks 11
Park 3 Administrations )

Export Processing Zone 7

(1 Administration and 4
branches)
Industrial Park
- developed by the IDB 6
(3 Administrations, 45 service centers,
1

and 1 environmental protection center)

- developed by local government 1
- developed by private sector 8
9
3

One-stop services provided in

industrial parks for applicants

~ 5~
 INFRASTRUCTURE (II)
Taiwan ranked 1st in “ state of cluster development” out of 133 economies
globally – World Economic Forum Global Competitiveness Report 2014-2015.

Taipei metropolitan area

Nankang Software ● Knowledge-intensive industrial cluster

1
Park
Hsinchu Industrial ● Software, IC design, Biotech, HQs
Park
Hsinchu Science-based
1 Taipei Hsin-chu corridor
Park ● ICT, Semiconductor, Optoelectronics,
Taichung Industrial Park Biotech, Precision machinery industries

2
Central Taiwan
Science-based Central Taiwan
Park ● Precision machinery industry (with well-

Yunlin Technology
2 developed supply chain)
● Textile industry
Industrial Park ● Bicycle industry
Tainan Technology
Industrial Park
Southern Taiwan

3 Science-based Southern Taiwan

Park ● Special niche in R&D
Kaohsiung
● Micro-nano system
EPZ Pingtung
EPZ 3 ● 3C integration
● Communication software applications &
Science-based Park
internet
Industrial Park
Export Processing Zone (EPZ)
~ 6~
 INFRASTRUCTURE (III)
Efficient Transportation System
High Speed Rail Keelun
g
Taipei

Airline
International Airport × 3
Domestic Airport × 18
Two Super Highway Taichung Passenger flight:
3,949 flights/weeks to 92 cities
Cargo flight:
373 flights/weeks

Express Railway Hualia

n

HARBOR
International Port × 7
Auxiliary Port × 2
Kaoshiun
g

~ 7~
 IFRASTRUCTURE (IV)
Very Low Utility Cost
Malays Singapor South Thail Franc
Country Taiwan Germany ia e H.K. Japan and China U.S. e U.K.
Korea

water price
10.72 （ 6.17
(NT$/per
cubic meter)
3） 67
(US$ 2.25)
10.74 30-80.6 17-37 8.24 65.0 -
(Shanghai)
19.3 99.5 61.6

）（3
Electricity 2.85
pricing for 2.59 10.11 / 2.30 4.48 3.82 3.20 5.71 3.03 (Shanghai) 3.32 4.95 6.87
home usage 10.76
(NT$/kWh) (€ 0.2433 /€
0.2588)

Electricity

）（2
pricing for 4.67
industry 1.83 /5.25 2.22 3.51 2.96 2.16 6.24 2.77 4.27 2.01 1.76 4.08
usage (€ 0.1123 /
€ 0.1263)
(NT$/kWh)

~ 8~
 HUMAN CAPITAL (I)
Taiwan has abundant skillful and
low cost engineers
University (graduate Research Institutes
of EE and ME per (ITRI, MIRDC, CSIST)
year) PhD 1,500
PhD 850
MS 5,200
MS 15,000
BS 1,800
[1]
2015 OECD

BS 80,000
2016 Average Nominal Annual Wage unit: USD

Taiwan Singapore S. Korea China

14,463 42,862 29,979 9,341
Resource: Taiwan Cabinet, OECD, tradingeconomics
~ 9~
 HUMAN CAPITAL (II)
Patents granted in US

No. of Patents
All Patents Invention Patents Design Patents Per Million
Population
No. of No. of No. of No. of
Rank Country Rank Country Rank Country Rank Country
Patents Patents Patents Patents

1 U.S. 155,304 1 U.S. 140,960 1 U.S. 14,335 1 Taiwan 535

2 Japan 54,287 2 Japan 52,409 2 Japan 1,878 2 USA 478

3 S. Korea 20,162 3 S. Korea 17,924 3 S. Korea 2,238 3 Japan 440

4 Germany 17,583 4 Germany 16,549 4 Germany 1 1,040 4 Israel 417

5 Taiwan 12,567 5 Taiwan 11,690 5 Taiwan 877 5 S. Korea 392

10 China 8,997 12 China 8,116 8 China 881 - China 0.92

Source: USPTO, 2015

~ 10~
 IPR PROTECTION
Taiwan recognize the importance of
encouraging innovation, we simply can not
tolerate any IPR infringements. In hence, we
have push our Intellectual Property Right
Protection measures to the highest level. We
even established IPR Protection Police Squad
and IPR Courts.

In order to unify the efforts of all related

Ministries, the Cabinet initiated the “IPR Action
Plan” to ensure continual and long-term effort
to maintain the momentum in improving IPR
environment.

~ 11~
 FINANCIAL ADVANTAGES −Tax
Singapor South
Item Taiwan China Japan
e Korea
Corporate
17% 25% 17% 20% 30%
Tax

VAT 5% 17% 7% 10% 5%

• The lowest Corporate Tax in Asia

According to the newly promulgated “Statue of Industrial
Innovation”, the cooperate income tax is reduced from 25% to
17%, starting from 2010.

• Tax exemption for R&D Activities

Credit for R&D spending: 15% of R&D expenses can be
deducted from the corporate tax (up to 30% of the tax be
levied).
~ 12~
FINANCIAL ADVANTAGES −Grants
Multinational Innovative R&D Centers
● Eligibility
Taiwan branches or subsidiaries of foreign companies those
have been legitimately
established and continuously existed in accordance with the
laws of both the local and home country.
● What you can enjoy
Subsidy for Operating Capital, e.g. Salaries of Local R&D
personnel, remunerations of overseas R&D personnel, Offices
& Labs rent……incurred by running the R&D center project.
R&D Project
● Funding up to 50% to support innovative activities, such as
technology research or new product development.
● If the item is listed on “Key product developing program”,
extra 20% funding support will be granted. (cap still 50%)
~ 13~
Endorsed by Famous Rating Institutes
Institute Report/Index Taiwan
Ranks
International Institute for 2016 World Competitiveness
Management Development
6(59)
Yearbook
(IMD)
World Bank Doing Business 2016
34(183)
Business Environment Risk 2016 2nd Business Risk
4(50)
Intelligence (BERI)
Service

World Economic Forum 2016 World Competitiveness

(WEF) Report
13(133)
EBS University 2010 Innovation Capacity
Index, ICI
9(131)
~ 14~
 Taiwanese Machinery Industry(1/5)
World Ranking
Basic Data Export: 17 th Import:14 th

● Production:
Unit:mUSD

$32.77B
● 64% Export
● Manufacturer
#: 16,572
● Employer #:
277,658
● 95% SMEs
Source: Machinery Association, Taiwanese
Custom

15
 Taiwanese Machinery Industry(2/5)

Source: Taiwan Custom

TOP 1 TOP 2 TOP 3 Taiwan Export

Category
weighting( weighting weighting weighting
country country country rank
%) (%) (%) (%)

Machine
Germany 22.1 Japan 20.2 Italy 8.9 4 7.5
Tool
Wooden
Germany 23.4 China 20.8 Italy 16.5 4 7.9
Machine
Plastic
Germany 22.6 China 13.2 Japan 10.7 6 5.4
Machine
Robot Japan 40 Korea 7.6 Germany 6.6 7 2.2
： UNCTAD
source
16
 Taiwanese Machinery Industry(3/5)
Machine Tool Industry Control System

1. production: $4.3B controller, driver, servo

2. makers/employee ：1,542/34,447 motor

Mainly for 3-axis, reliability
Tool Magazine and stability need to be
Servo Motor, Reduction improved, product
Spindle line and
System
Gear, Cam, Tool Arm after sales can be further
Motor, Clamping
Mature and stable, supply expanded.
MAZAK 。 Mechanism, Bearing
70% of low to medium
Arm-type magazines for
speed spindles are made
CNC vertical machining
locally.
centers are major tool
Lack of high speed
magazineStructure
in Taiwan. Feed & Positioning
spindles capability.
Base, Column, Sadle, Indexing Plate/Encoder/Optical
Spindle Head, Work Table 、
Scale Linear Guide, Ball Screw
Die casting capability OK, Can provide complete system
self-sufficent. Supply 80% of Linear Guide, Ball
Screw’s domestic market. Second
17
 Taiwanese Machinery Industry(4/5)
Plastic and Rubber Machinery
1. production: $1.5B Injection System
2. makers/employee ：200/8,000 Screw(drive, feed)
Control System Domestic share: 70%
Controller, Servo Motor, Maker: Tan Star
Driver
.
Domestic share:
Hydraulic(including
Electrical Hydraulic Hybrid)
80%
Makers: Mirle, Advantec-LNC

Chiller, Mold
Auxilliary Mold Clamping Hydraulic System
Temperature
Base, Toggle Type Pump, Valve
Controller, Robotic
Mechanism, Sensors Domestic share: 80%
Arm
Domestic share: 80% Makers: Camel
Domestic share : 90%
Makers: Yann Bang,
、
Makers: CLF FCS Precision, Yoeshe

Shini 18
 Taiwanese Machinery Industry(5/5)
Industrial Robot Industry
1. production: $1.7B
2. makers/employee ：95/7,900
Servo Drive System
(motor+precision reduction
gear)
Servo Motor, Harmonic
Drive/Cycloid/Planetary
Gear Reducer
Domestic share: 20%
Makers: Delta, Hiwin
Other parts
Linear Guide, Screw, Gripper,
Welding/Laser/Spindle module
Domestic share: 90%
Makers: Hiwin, TBI motion
Controller
Industrial Computer, Human
Machine Interface
Domestic share: 30%
Makers: Delta, Advantec-LNC, Syntec,
Nexcom
19
 TAIWAN MACHINE TOOLS(1/4)
(Cluster of Machine Tool Industry)
Machine builders Component
makers
North North
170 companies 300 companies
(16%) (20%)
Press Bearing, ball
screws, linear
machines,
guide ways,
lathe,
tooling…
grinding
machines…
Central
Central
535 companies
1050
(72%)
companies(70%)
Machineing
Ball screws,
centers, lathe,
spindles, linear
WEDM……
guide ways rotary
South table, ATC…
95 companies South
(12%) 150 companies
Machineing (10%)
center, lathe, pcb
machines…
、
Spindles toolin
g…

~ 20~
 TAIWAN MACHINE TOOLS(2/4)
(Supply by Value)
In 2016, 4th exporter and 7th producer in the
world. Unit: MUSD

  2013 2014 2015 2016

Production 4,541 4,930 4,097 3,713

Export 3,548 3,753 3,184 2,897

~ 21~
 TAIWAN MACHINE TOOLS(3/4)
(CNC controller market)

Application of
CNC controller in
High End
Taiwan 28%
Machining
28%
Taiwan-made
14,000 units
、
5-Axis Multi
center task
3000 units
NC lathe 22% (8%)
72%
Imported Standard
WEDM 18% 36,000 units Models
Grinding 31,000 units
16% (87%)
machine

Robot 11% Other

Other 5% 2000 units

(5%)

~ 22~
 TAIWAN MACHINE TOOLS(4/4)
10
(Competitive Position) ：
UNIT MUSD

9 NAGASE
YASDA
Index Makino
Mitsui Seiki
8
Tornos Mori Seiki
MikronMatsuura Heller
Okuma
Brother Yamazaki Mazak
7 WEL
Technology level

E Waid Nakamura Tome Gleason

Quaser Hurc Doosan Infracore
a Tongtai
Awea o Haa
6 YC Victor
Fair Friend s
M
HartFord
You Ji
5
DMTG Shenyang
Group
4

2 GERMANY Switzerland JAPA U.S. TAIWAN KOREA CHINA

N A.

1 100 300 500 1000 1500 2000 2500 3000

Source:
Revenue GARDNER
0 23
~ 24~
~ 25~
 ACCESS CHINESE MARKET
Business Environment Comparison between Taiwan and China

Taiwan China
“Taiwan to China “ faster
Transportation than “China inland −
transport”

Corporate Tax 17% 25%

Not at All
Highly Controlled
(2011 Index of Economic
(Equity Share,
Controls Freedom ranks 25 out of
Production, Sale,
183, Heritage Fundation &
Remit Profit)
WSJ)
IPR Well Protected ?

Sufficient and low cost

Utilities Electricity and Water supply
Not stable

The best way to invest in China is via ~ 26~

~ 27~
~ 28~
 Some Ideas of Possible
Cooperations
between Germany and Taiwan
German machinery industry can team up
with Taiwanese companies aiming
specifically for Chinese and S. E. Asian,
even Japanese market in medium to high
level products.
German machinery industry may consider
working together with Taiwanese IT and
precision machine industries to speed up
the Industrial 4.0 process.
Close to the biggest market, deeper
cooperation in the field of Semi-Conductor
~ 29~
MOEA

Danke Schön!

30
30
~ 30~