Taiwanese machinery companies are likely to be surpassed by their Chinese rivals over the next five or 10 years as they fall behind in competitiveness, Hiwin Technologies Co (上銀科技) chairman Eric Chuo (卓永財) told a forum in Taipei yesterday.
Hiwin is one of the nation’s leading machinery makers, distributing ball screws, liner guideways and industrial robots to its global clients.
Chuo said the government has been “unpractical” in its promotion of the nation’s long-term industrial development, neglecting the real challenge facing the industry.
The transition to “industry 4.0” should be a gradual process, since many local companies are obsolete, including those that make hand tools and metal hardware, Chuo added.
Industry 4.0, or the “fourth industrial revolution,” refers to an industrial transformation with a focus on “smart” manufacturing, such as factory automation and Internet of Things applications.
Last year, the Cabinet launched a plan to transform the nation into a global manufacturing hub for “intelligent” machinery.
Within the policy framework, the government is to build an industrial park in Taichung’s Shengang District (神岡) and a research center in the city’s Situn District (西屯) for the development of “smart” machinery.
The policy came after the nation saw two years of decline in machinery exports, with shipments last year falling 1.7 percent annually to US$21.1 billion.
Shipments to local machinery makers’ biggest market — China — declined 2.7 percent to US$5.26 billion and those to the US edged down 0.9 percent to US$3.78 billion, according to data compiled by the Taiwan Association of Machinery Industry (台灣機械公會).
Chuo said Taiwanese manufacturers should overcome the production-oriented mindset and seek their fortune in innovation, given the nation’s technological advantage.
The government should also spend more effort to foster collaboration between universities and businesses to help local manufacturers, he added.
However, one problem for local machinery industry is that the sector has suffered from a lack of financial support, which hampers the development of creative start-ups, Chuo said.
Venture capitalists are interested in investing in service and high-tech sectors rather than the machinery sector, he said.
If Tesla Inc was founded in Taiwan, the electric car maker might not have been able to grow so rapidly in the absence of angel investors, he added.
Chuo also said that the central bank should tighten its control over hot money flows.
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