Taiwan's machinery and electronics manufacturing sectors are rapidly integrating into a "mechatronics supply chain," with a dedicated "precision machinery zone" to be launched at SEMICON Taiwan 2024 and slated for early September. The initiative aims to facilitate Taiwanese machinery manufacturers' entry into the semiconductor industry, initially focusing on supplying semiconductor backend process machines and inspection and measurement equipment, with the long-term goal of achieving import substitution, according to the Taiwan Association of Machinery Industry (TAMI).
The ongoing global trade tensions have evolved into a technology war, disrupting long-established supply chains and prompting a shift towards decentralized manufacturing and regional industrial ecosystems. As globalization gives way to regionalization, industry stakeholders emphasized the need for technological diversification and enhanced control over multiple sources of critical components to mitigate geopolitical risks.
In response to these development trends, Hsu Wen-Tong, secretary general of TAMI, highlighted the importance of strengthening the resilience of local industrial chains. This entails fostering cross-domain cooperation and upgrading "coopetition" between industries to diversify risks effectively, given that fragmentation of industries could undermine Taiwan's overall industrial competitiveness. An integrated approach is imperative to address challenges and capitalize on opportunities such as strengthening semiconductor supply chain autonomy and advancing smart manufacturing.
Historically, Taiwan's machinery and electronics manufacturing industries operated like two parallel lines despite their significant economic contributions. However, recent efforts led by TAMI aim to bridge this gap by promoting cross-domain integration, particularly in the equipment sector. The focus is on integrating Taiwan's machinery and electronics sectors to cultivate a robust "mechatronics supply chain," with an emphasis on supporting the semiconductor industry's growth.
TAMI has collaborated with Semiconductor Equipment and Materials International (SEMI) since 2021 to strengthen Taiwan's semiconductor supply chain self-sufficiency. Through initiatives like SEMICON Taiwan, which saw over 40 Taiwanese precision machinery makers participate in 2023 and will introduce the "precision machinery zone" in 2024, TAMI seeks to elevate Taiwan's precision machinery industry value-added transformation and facilitate its entry into the semiconductor domain.
Regarding opportunities for Taiwan's machinery industry within the semiconductor sector, TAMI highlighted significant potential for import substitution, particularly in semiconductor backend processing and inspection equipment. Close cooperation between the machinery and semiconductor industries is deemed crucial for fostering advancements in next-generation technologies such as compound semiconductors and advanced packaging, offering an opportunity for machinery makers to embrace the semiconductor industry's potentially explosive growth in the next golden decade.
TAMI's statistics revealed that while the front end of semiconductor manufacturing dominates equipment revenue, Taiwan's domestic supply chain is increasingly contributing to customized equipment, modules, and precision machining. This trend enables Taiwanese equipment makers to play a significant role in emerging application areas like third-generation compound semiconductors, energy efficiency, carbon reduction, and smart automation in the future.
