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Taiwan’s Machinery Sector Eyes Defense Contracts for Survival

At the 80th Anniversary Celebration of the Taiwan Association of Machinery Industry (TAMI) on November 6, Chairman Chuang Ta-li emphasized that Taiwan’s machinery industry cannot be like Shohei Ohtani in professional baseball — excelling in both pitching and batting as a “two-way player.”
Instead, he urged companies to specialize in their respective fields and seek niche markets. Chuang noted that national defense and aerospace are stable markets where local companies can pursue maintenance business opportunities and respond to President Lai Ching-te’s call to participate in the defense industry.

Chuang said that Taiwan’s machinery sector, to some extent, is already linked with the defense industry — many companies supply equipment to manufacturers such as AIDC (Aerospace Industrial Development Corporation). However, he stressed that what matters most is for the government to place more domestic orders instead of relying heavily on international procurement.

Kuo Ai-mei, General Manager of San Feng Machine Co., added that the company’s large lathes have long served the defense and aerospace sectors, and it is certainly willing to support the government’s efforts to strengthen the local defense industry.

Industry sources revealed that many Taiwanese machinery companies have already joined the global aerospace and defense supply chains. Their products and capabilities include carbon-fiber composite materials, large lathes, five-axis machines, laser EDM (Electrical Discharge Machines), parts processing, motors, and power modules — demonstrating the solid potential to support Taiwan’s growing defense industry.

Chuang further stressed that the key challenge facing Taiwan’s machinery industry today is talent. Unless companies can afford to pay salaries higher than those offered by TSMC, it will remain difficult to attract skilled professionals. In addition, tariffs and exchange rates continue to be major obstacles for the industry. He urged that Taiwan–U.S. tariff rates be reduced as much as possible and that the government announce related policies soon.

As for the New Taiwan dollar, which many institutions predict will appreciate, Chuang said he hopes the exchange rate will rise slowly. The machinery industry is facing a tough year, and he has met with President Lai multiple times to discuss the impact of tariffs on local businesses. Given limited government resources, he also hopes for more flexible loan programs to assist companies in the sector.

TAMI noted that despite global instability, the machinery industry is gradually recovering and showing steady growth. Looking ahead to next year, the association expects that the Middle East conflict will subside and reconstruction projects will bring new business opportunities.
To guide the development of the industry in the next decade, TAMI proposed six key strategies:

  1. Get closer to customers and become a trusted partner.

  2. Form strategic alliances to provide integrated, group-based solutions.

  3. Develop niche products and specialized application markets.

  4. Build differentiated core technological capabilities.

  5. Cultivate diverse talent for the machinery sector.

  6. Strengthen corporate structures to enhance competitiveness.

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