CSC has increased investments in high value-added downstream production lines, environmental protection and energy saving facilities, and replacement of outdated equipment, and has also requested suppliers to maximize the percentage of domestic supply, aiming to reduce costs and foster domestic industries. Large quantities of refractory materials, parts and components, and hardware equipment for repairing and maintenance are required. In addition to requesting suppliers to increase local portions, CSC also contributes to the upgrade of related domestic industries, and lessen the dependency on foreign suppliers, to ensure on-time delivery, exceptional service, and lower cost. Moreover, CSC actively promotes all kinds of domestic manufacturing activities, and signs long-term supply contracts with domestic refractory material manufacturers to effectively cut down inventory level.
With regard to the localization of mechanical and electrical control parts and equipment, localization means that the workpiece was designed (original design or design modified according to requirements) and manufactured by a Taiwanese company. In terms of localization of production equipment, localization means that the equipment is designed, manufactured and assembled by Taiwanese manufacturers (or CSC), or having a part of the above processes entrusted to a Taiwanese manufacturer. The main purpose is to reduce reliance on overseas manufacturers to shorten delivery time, reduce costs, and enhance independent design and manufacturing capabilities.
Raw materials and equipment suppliers are the main suppliers of CSC, which has a total of 33,234 suppliers. A total of 2,406 equipment and materials suppliers signed a contract with CSC in 2022, in which 1,862 were domestic suppliers, accounting for 77.39% of suppliers that signed contracts; a total of 952 are located in Kaohsiung and Pingtung, accounting for 51.13% of domestic suppliers.
| Domestic Manufacturing Results | |||||
|---|---|---|---|---|---|
| Items | 2020 | 2021 | 2022 | ||
| Refractory Materials(I) | Amount (NT$100 M) |
18.7 | 20.3 | 20.6 | |
| Local Manufacturer (%) |
59.3% | 62.5% | 61.9% | ||
| Spare Parts & Equipment | Mechanical | Number of Work Orders | 190 | 163 | 190 |
| Amount (NT$100 M) |
2.875 | 2.05 | 2.1 | ||
| Electrical & Control | Number of Work Orders | 65 | 77 | 76 | |
| Amount (NT$100 M) |
0.926 | 0.933 | 2.0 | ||
| Production Equipment | Production Line and Turnkey Engineering Projects | Number of Work Orders | 50 | 62 | 67 |
| Amount (NT$100 M) |
25.81 | 14.92 | 12.7 | ||
Note I:Currently, CSC have long-term contracts with domestic refractory material suppliers. However, in recent years, international refractory material prices and sources have been unstable, which may further affect the prices and supply of domestic manufacturers. Based on the consideration of cost and stable supply of materials, we have gradually developed new sources of foreign materials, reducing the number of domestic manufacturers' long-term contracts by 20-30%, and switching to low-priced and high-quality foreign manufacturers to supply materials, which has achieved cost reduction and material source stability.