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Key Industries

Smart Machinery

  • date:2018-01-29
Smart Machinery

Source: Industrial Development Bureau, MOEA
Last Updated on: 2017/12/31

I. Policy Focus

1. Smart Machinery
Core and application technologies will be developed in line with the promotion of Industry 4.0, and the up-. mid-. and downstream sectors will be integrated in connection with local, international, and future trends. Priority will be given to introducing smart manufacturing into large manufacturers and SMEs, making effective use of leverage and diffusion effects to stimulate rapid annual growth in production value.

2. Cultivating Talent for the Smart Machinery Industry
Between 2017 and 2020, an estimated US$70 million will be invested in the Central Taiwan Science Park and the Southern Taiwan Science Park to establish an intelligent robot self-manufacturing site as well as to cultivate new enterprises and train professional researchers.

3. Smart Machinery Industry Promotion Program

The Executive Yuan approved the "Smart Machinery Industry Promotion Plan" on July 21, 2016 with the aim of developing smart machinery applications by combining the advantages of Taiwan's machinery industry and ICT industries to develop smart machinery applications. A number of supporting policies have been implemented to accelerate development of the smart machinery industry:

(1) Establishment of a "Smart Machinery Industry Promotion Office" to help build up an ecosystem for the smart machinery industry

(2) Establishment of a Smart Machinery Development Center at Shuinan Smart City in Taichung.

(3) Establishment of a Smart Machinery Industrial Park at Fengzhou in Taichung City as the home base for the manufacturing of smart machinery products.

Leveraging Taiwan’s mature existing industries to develop the smart machinery industry



II. Investment Environment

1. Mature Machinery Industry Clusters

Central Taiwan is already an established center for the international machinery industry. Additionally there is specific machinery industry clustering in specific areas of Taiwan, including clusters for machine tools and key parts and components, semiconductor production equipment, intelligent robots, and automation components.

2. Global Manufacturing Base for Information/Communications and Semiconductor Industry Components and Equipment
Taiwan is an important global base for the manufacturing of parts, components, and equipment for the information /communications industry and semiconductor industry, and Taiwan possesses industrial networks and systems for supporting the development of smart machinery. Taiwan has a clear advantage, in terms of parts and components, equipment, and supply chain, in supporting the development of the smart machinery industry.

3. Applications Market for the Manufacturing of Machinery and Equipment

Taiwan has internationally competitive semiconductor and flat screen display, electronics and information/communications, automobile parts and components, bicycles, aviation parts and components, metal products, textiles, and other industries, all of which are main application markets for smart machinery products and solutions.

4. Industrial Parks for Smart Machinery Investment

There are many science parks and industrial estates in Taiwan that offer an environment conducive to investment and the establishment of manufacturing facilities, including science parks in Taichung, Tainan, and Kaohsiung; the Shuinan Smart City and Fengzhou Smart Machine Industrial Park in Taichung, and the Dapumei Precision Machinery Industrial Park in Chiayi.

Precision machinery clusters in Taiwan

Production and export value of Taiwan’s machinery industry

Taiwan’s smart machinery application industry clusters

Taiwan’s Global Business Opportunities for Smart Machinery Applications




III. Investment Opportunities

1. A Hub for International Smart Machine Research and Development

International research firms and manufacturers can establish new companies or set up research and development centers or production bases in Taiwan, or engage in joint R&D ventures, technology transfer, or other means of joint participation in the development of Taiwan's smart machinery industry and the global smart manufacturing and applications market.

2. Participation in Opportunities from Sustainable Growth

(1) Taiwan is the 7th-largest manufacturer of machine tools in the world with a production value of US$4.62 billion in 2015, accounting for a 5-6% share of the global market. The smart machinery industry is expected to enjoy a compound annual growth rate of 2% up to 2019, increasing to more than 5% in 2023.

(2) Taiwan's semiconductor industry continues to invest in advanced production processes. Firms in the supply chains of the information and communications, display panel, automotive, and electric vehicle industries are also investing in the installation of smart automated production lines. Lucrative business opportunities will derive from the stable growth in demand for smart machines.

3. Opportunities Arising from the Development of Smart Machinery

(1) Digital simulation and analysis, product life cycle management, big data analysis, machine learning, artificial intelligence.

(2) Smart sensors, industrial and service robots, semiconductor front-end production and advanced packaging equipment, additive manufacturing, aerospace machine tools, and high-end controllers.

(3) Solutions that span sensors and control devices, production equipment and production lines, and integrated information for smart enterprise operation.

Figure 6 Taichung Fengzhou Technology-Based Industrial Park

Taichung Fengzhou Technology-Based Industrial Park



IV. Investment Incentives

1. Tax and Tariff Incentives

(1) Business income tax rate in Taiwan is 17%.

(2) Up to 15% of R&D expenses may be credited against the profit-seeking enterprise income tax payable by the company in the current year.

(3) Imported machinery that is not yet manufactured domestically may enjoy tariff-free treatment.

(4) Royalty payments to foreign companies for imported new production technologies or products that use patents, copyrights, or other special rights owned by foreign companies are, with the approval of the Ministry of Economic Affairs, exempt from the business income tax.

(5) For operators stationed in Export Processing Zones, Science Parks and Free Trade Zones, imported raw materials, fuel, materials, semi-processed goods, and machinery may be exempt from import duty, commodity tax, and sales tax. The business tax rate on goods and services shipped abroad from such areas is zero.

2. R&D Subsidies

(1) Global Innovation and R&D Partnership Plan: Subsidies are available for up to 50% of total spending by foreign enterprises on the establishment of R&D centers in Taiwan.

(2) Advanced Technology Research Plan: Subsidies are available for 40% to 50% of total development funding for new technologies that are not yet mature in Taiwan and that will, in the future, generate strategic products, services, or industries.

(3) Integrated R&D Plan: Subsidies are available for 40% to 50% of total project cost for the integration of key and cross-sector technologies.

(4) Industrial Upgrading and Innovation Program: For companies having R&D teams in Taiwan, subsidies are available for 40%-50% of funding for projects that conform to government programs and up to 40% of funding for projects generated by the applicants themselves.



V. Major Foreign Investors in Taiwan

Visedo of Finland, a heavy-duty electric motor manufacturer, has entered into a joint venture with TECO for the production of high-performance motors and driver systems for ships and automobiles. The cloud computing unit of IBM of the USA has formed a strategic alliance with ASUS for the launch of a joint cloud strategies initiative and plans to launch HealthBot, a healthcare robot, in Taiwan. Safran of France and the Rolls-Royce Group have engaged in joint ventures with AIDC, Aerowin Technology, Magnate Technology, Drewloong Precision, and NAFCO for the production of parts and components for aircraft engines. Israel and Taiwan have engaged in joint ventures in digital manufacturing, high-end medical materials, new-generation communications, and information security. UL, a global safety testing firm based in the U.S., will establish a test center for IoT. Siemens of Germany and Yencheng Machinery have jointly developed solutions for pharmaceutical machines to help speed up research and development in biopharmaceuticals in Taiwan.