Exploring Future Development Opportunities for Taiwan’s Machine Tool Industry under the Global Hydrogen Economy
Preface
Taiwan, renowned as a global technology hub, boasts world-class semiconductor capabilities and numerous science parks such as Hsinchu, Central, and Southern Taiwan Science Parks, along with over 200 industrial zones and more than 100,000 manufacturing companies. Taiwan’s industrial technology and manufacturing capacity are highly competitive internationally. The machine tool industry, often called the “mother of all industries,” plays a critical role in sectors such as semiconductors, aerospace, energy, medical devices, automotive, and precision machinery. Machine tools enable the rapid production of high-precision, high-quality components and equipment, making them indispensable for innovation and development across industries.
As of September 2023, more than 150 countries have pledged to achieve net-zero emissions by 2050, signaling a global transition from a carbon-based economy to a hydrogen economy. According to the International Energy Agency (IEA), without aggressive carbon reduction measures, global temperatures could rise by 6°C by 2060. The net-zero roadmap includes targets such as 60% of global car sales being electric by 2030, 50% of aviation fuel switching to hydrogen or biofuels by 2040, and all vehicles powered by electricity or hydrogen by 2050. Against this backdrop, hydrogen and fuel cell technologies are emerging as the next major industries.
The hydrogen value chain spans production, transportation, storage, and end-use applications. Key components such as pipelines, electrolyzers, and fuel cells require advanced machine tool technologies for development and mass production. This article provides an overview of the machine tool technologies needed for hydrogen and fuel cell components, along with real-world examples of industrial collaboration, aiming to inspire Taiwan’s machine tool industry to seize opportunities in the hydrogen economy.
Principles and Applications of Hydrogen and Fuel Cells
A hydrogen fuel cell is a power-generating device that differs from conventional batteries like lithium-ion, as it does not require hours of charging. Instead, it continuously generates electricity as long as hydrogen fuel is supplied. Refueling a hydrogen vehicle takes only 3–5 minutes, providing a range of over 650 km, with zero carbon emissions during operation, making it a clean energy source.
Fuel cells operate by splitting hydrogen into protons and electrons at the anode. Electrons flow through an external circuit to generate electricity, then combine with oxygen at the cathode to form water, with heat and water as byproducts. Hydrogen can be produced from natural gas, methanol reforming, or water electrolysis. Historically used in semiconductor and industrial processes, hydrogen is now recognized as a clean fuel for power generation and transportation, offering solutions to pollution and greenhouse gas emissions. It also supports renewable energy integration, grid balancing, and energy storage.
Globally, over 60 countries have announced national hydrogen strategies. As of January 2023, more than 1,000 large-scale electrolyzer projects (>1 MW) have been launched, and hydrogen demand is projected to reach 500 Mt by 2050. Automakers such as Toyota, BMW, and Mercedes-Benz are actively developing hydrogen vehicles. Taiwan’s 2050 net-zero roadmap identifies hydrogen as a key strategic pillar. Domestic initiatives include hydrogen-powered buses, with a target of 35 units by 2030, and hydrogen designated as an official energy source under Taiwan’s Energy Management Act. Internationally, there are over 1,200 hydrogen refueling stations, with Japan and South Korea each exceeding 180 stations.
Taiwan’s hydrogen and fuel cell industry has grown rapidly since the establishment of THFCP in 2002, now comprising over 90 companies across the supply chain. Taiwan has developed products such as drones, motorcycles, forklifts, generators, and electrolyzers, with companies like Hengstar Hydrogen entering Southeast Asian markets. Partnerships with global organizations in the UK, Canada, Australia, and others aim to position Taiwan as a key player in hydrogen trade and technology.
Machine Tool Applications in Hydrogen Fuel Cell Manufacturing
Fuel cell stacks consist of critical components such as bipolar plates, gas diffusion layers, membrane electrode assemblies (MEA), and end plates. Metal bipolar plates can be produced using CNC milling for flow channel formation, followed by stamping for mass production. Solid oxide fuel cells (SOFC) require ceramic components manufactured via powder metallurgy and sintering. Other processes involve welding machines, screen printers, and automated assembly systems.
Examples of collaboration include Kingfong’s stamping machines supporting Hexin’s metal plate production, Sheng Ying’s injection molding for bipolar plates, and Shun De’s use of Japanese and Swiss machine tools for stamping. Carbon-based plates utilize compression molding, while MEAs employ roll-to-roll coating systems. Entire fuel cell stacks are assembled using automated machinery.
Taiwanese companies have successfully entered global markets. For instance, Porite has supplied sintering technology to Bloom Energy for over a decade. A notable recent case is Quaser’s laser machining technology enabling Delta Electronics and UK-based Ceres Power to mass-produce SOEC and SOFC components. Delta invested NT$2.2 billion in 2024 to establish pilot production lines and plans to scale up to 10 MW SOFC and 30 MW SOEC annual capacity by 2026.
Laser machining offers high precision and speed, ensuring surface flatness, gas tightness, and conductivity for SOFC components. Non-contact processing reduces material stress, improving yield and lowering costs. Intelligent monitoring systems further enhance production stability and efficiency.
Challenges and Opportunities
Taiwan’s machine tool industry faces challenges such as global trade tensions, rising costs, and fierce competition from Japan, Germany, and Korea, as well as price-driven expansion by China. However, the rise of AI and net-zero policies presents new opportunities, particularly in hydrogen fuel cell applications like buses, trucks, generators, drones, and ships. Government subsidies for smart manufacturing and low-carbon transformation further support industry growth.
Conclusion and Recommendations
Taiwan should leverage its technological strengths and geographic advantages to promote advanced manufacturing and net-zero technologies. Policies should focus on digitalization, green manufacturing, and hydrogen capacity targets. The machine tool industry must embrace smart, high-precision, and sustainable manufacturing to remain competitive globally. Collaboration with the hydrogen sector will unlock new markets and position Taiwan as a cornerstone of the global hydrogen economy.
