11 Taiwanese Machine Tool Makers Form Alliance to Tap Aircraft Parts Segment

Eleven machine-tool makers in Taiwan have formed an alliance, spearheaded by the Ministry of Economic Affairs (MOEA) and coordinated by Goodway Machine Corp., to develop machines to process aircraft precision parts, which is likely to help enhance added-value for the island's machine-tool industry.

The makers include AWEA Mechantronic Co., Ltd. (Goodway's subsidiary), Kao Fong Machinery Co., Ltd., Falcon Machine Tools Co., Ltd., Fair Friend Enterprise Group, Victor Taichung Machinery Works Co., Ltd., Dahlih Machinery Industry Co., Ltd., She Hong Industrial Co., Ltd., Vision Wide Tech Co., Ltd., Royal Precision Tools Co., Ltd. and Chung Hsin Electric & Machinery Co., Ltd.

According to Goodway Chairman D.H. Yang, the alliance will mainly develop vertical five-axis, double-column five-axis, vertical lathing-milling combo, bridge-type double-column, and vertical five-axis machining centers to process aircraft components in cooperation with the government-backed Industrial Technology Research Institute (ITRI) and privately held Aerospace Industrial Development Corp. (AIDC).

Since going public in August 2014 in Taiwan to restructure from a state-owned firm governed by MOEA to a private firm, AIDC has increased outsourcing. Industry executives estimate the aircraft builder to create at least NT$30 billion (US$1 billion) of business over the next two years for contract suppliers and machine-tool makers.

AIDC executives say aerospace is one of the fastest growing industries globally, with the industry in Taiwan, for instance, posting sales of NT$78.3 billion (US$2.6 billion) in 2012 relative to 2000's NT$25.2 billion (US$840 million), with global aircraft builders to boost capacity to turn out 26,000 airplanes to keep up with busy air traffic, projected to grow annually at 4.7% over the next 20 years.

To maximize profitability by minimizing production costs, major aircraft builders in Europe and the USA are subcontracting work to overseas firms who are competitive both in manufacturing technique and price, according to IDC executives.

Goodway has submitted to MOEA the alliance proposal, to be implemented for three years from the end of 2014. (KL)