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Taiwan's Aircraft Builders and Machine Tool Makers Form Alliance to Tap Global Aircraft-building Market

Dec 23, 2015 | By Ken Liu

Taiwan's machine-tool makers have entered into an alliance with the island's aircraft builders and a government-backed laboratory to develop intelligent industrial technology to sharpen their machine tool capability to manufacture aircraft, in an effort to tap the global aircraft-building market, which reportedly is estimated at US$5.2 trillion over the next 20 years.

The Machine Team, also known as M-Team, formed by the prominent local machine-tool makers, including Hiwin Technologies Corp., Victor Taichung Machinery Works Co., Ltd., Yeong Chin machinery Industries Co., Ltd., Litz Hitech Corp., Deta International Corp., and Quasar Machine Tools Inc., has recently signed a pact to form the AIM Team with the Aerospace Team (A-Team) and the Intelligence Team (I-Team).

The A-Team is made up of around 100 Taiwanese manufacturers of aircraft products, including aircraft assembler Aerospace Industrial Development Corp., as well as components makers Evergreen Aviation Precision Corp. (EGAP), and Chung-Hsin Electric and Machinery Manufacturing Corp. (CHEM).

The I-Team is composed of the Mechanical and System Research Laboratories (MSRL) and Machine Tool Technology Center (MTTC) of the government-backed Industrial Technology Research Institute (ITRI).

Hiwin Technologies Chairman Eric Chuo, concurrently the chairman of Taiwan Machine Tool & Accessory Builders' Association (TMBA), points out that the island's machine tools are popular on the international market for good quality, and are comparable to Japanese and German machines, not to mention being competitively priced. However, Taiwan's aircraft-equipment makers typically use only imported machines.

Chairman B.C. Ke of the Taiwan Association of Machinery Industry (TAMI) notes that the island's precision-machinery makers shipped US$21.6 billion of equipment in all of 2014, to have generated total revenue of around NT$985 billion (US$29.84 billion), but local manufacturers of various industries still depended on imported machine tools totaling around US$22 billion, a fact that leaves him both regretful and ashamed for the island's precision-machinery industry.

Ke suggests the government offer local makers tax incentives on investment to encourage usage of locally-made five-axis machining centers and gantry-type machining centers as well as key components, which he says are relatively well made.   

AIDC Chairman R.X. Liao points out that the local aerospace industry has rarely used Taiwan-built machine tools only due to lack of familiarity and contact between the two sectors. He promises to invite local machine-tool makers to visit his company in early 2016 to build cooperation.

Tapping the global aircraft-building market returned Litz and Asia Pacific Elite Corp. (APEC) with profitable orders in the third quarter, when Taiwan's machine-tool industry suffered a 13-percent recession in exports.

Litz's five-axis machining centers can make aircraft parts ranging 400mm to 1.2 meters in length, having seen hefty orders from European and American manufacturers of aircraft parts that maintained the company's profitability in the third quarter to basically equal that of the comparable period last year.

Thanks to brisk orders from European, American, South Korean, the Middle East and Japanese manufacturers of aircraft and automotive molds, APEC saw its revenue in the Jan.-Aug. period spike 40 percent year-on-year and still has one year of undelivered orders. The company predicts its revenue to rise 80 percent and as much as double year-on-year by the end of 2015.

To sharpen competitiveness of Taiwan's machine-tool makers shooting for orders from international aircraft-components suppliers, the Ministry of Economic Affairs (MOEA) has picked the island's machine-tool sector as the manufacturing sector under its “Productivity 4.0” project to first help build intelligent manufacturing and service capabilities. Such project was approved by the Taiwan Cabinet in September 2015.

Deputy Director General D.S. Lo of MOEA's Department of Industrial Technology (DoIT) believes that intelligent technologies will boost added-value of Taiwan-made machine tools by over 30 percent.

He adds that the AIM Team's intelligent manufacturing systems will help the island's aircraft-product makers push into the global market, which is estimated to have a total demand of 36,770 civilian airplanes over the next 20 years.

Given that Taiwan's machine-tool makers mostly cluster in Taichung of central Taiwan and AIDC is also headquartered in the central Taiwan city, the Taichung City Government has pledged to play a part in the development of the island's intelligence-based aerospace industrial cluster in the city by setting up a dedicated zone on the 251-hectare Taichung Gateway District, formally an airport.

The Taichung City Government has invited AIDC and EGAP to open workshops at the zone. EGAP Chairman Y.G. Wang says his company is interested in the idea since it needs to boost capacity to handle increased orders from multinational aircraft builders. So far, his company has been contracted to build and assemble the bodies of Boeing civilian planes, as well as having won a six-year contract to develop and manufacture the outer combustion housings and diffusers for the fuel-efficient General Electric LEAP engines beginning 2016.


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