30-second overview: Taiwan was once a supply hub where "one in every three fasteners used by the United States came from Taiwan," and even played a decisive role during the Vietnam War. Yet with the United States imposing a 50% Section 232 tariff in 2025 and the European Union's CBAM carbon tariff approaching in 2026, this "rice of industry" sector, with annual output exceeding NT$50 billion and sustaining 30,000 households in northern Kaohsiung, is undergoing a life-or-death transformation from "selling by the kilogram" to "selling by the piece."
The Birth of a Vietnam War Hero: How Did Small Screws Fasten the Foundations of Taiwan's "Kingdom of Screws"?
In the 1970s, as U.S. military helicopters hovered over the jungles of Vietnam, there was a strong chance that each fastening screw on their fuselages came from distant Gangshan, Kaohsiung, in Taiwan. This is not an exaggeration. During the Vietnam War, the U.S. military purchased screws and nuts from Taiwan in large quantities, making Taiwan a designated supply center for the U.S. military; at the time, one in every three fasteners used by the United States came from Taiwan 1. This seemingly unremarkable town was not only a key link in the U.S. military's Vietnam War supply line, but also quietly laid the foundation for Taiwan's "Kingdom of Screws" on the global industrial map 2.
There was a time when Taiwan's screw industry ranked first in the world by export volume, dominating one-sixth of the global market 3. Even today, Taiwan remains the world's third-largest fastener exporter, behind only China and Germany 4. Yet these "hidden champions," which have worked quietly on the international stage, now face unprecedented existential challenges amid volatile geopolitics and the global net-zero transition.
📝 Curator's note: Taiwan's screw industry is not only a matter of cold numbers and steel; it embodies a condensed history of Taiwan's economic development. From its rise amid war, to its struggles under globalization, to today's smart transformation, every screw tells the story of an era. Beneath the halo of semiconductors, Taiwan's so-called "sacred mountain that protects the nation," these traditional industries are demonstrating in another way Taiwan's indispensable resilience in global supply chains.
The Father of Taiwan's Screw Industry: Chun Yu Works and the Origins of the "San Shing in the North, Chun Yu in the South" Clusters
The legend of Taiwan's screw industry began with Li Chun-yu, known as the "father of Taiwan's screw industry." In 1949, the three brothers Li Lie-yun, Li Chun-yu, and Li Chun-tang founded Chun Yu Works in Gangshan. At first, they manufactured sewing needles and bicycle chains, but poor heat-treatment technology caused the chains to break repeatedly. As they fell into difficulty, Li Chun-yu turned to producing stamped sheet-metal nuts, opening a new chapter for Taiwan's screw industry 5 6.
Chun Yu Works was not only Taiwan's first screw factory; it has also been praised as the "Whampoa Military Academy" of the screw sector. According to statistics, around 70% of Taiwan's screw-industry business owners came from Chun Yu or were shaped by its technical training. This culture of branching out, together with Tainan's San Shing Fastech, known as "San Shing in the north," formed the dual core of Taiwan's fastener industry. The "20-kilometer cluster" that took shape in the Gangshan area integrated raw materials, forming, heat treatment, electroplating, packaging, and export into a single flow. This highly specialized division of labor gave Taiwan's screw industry unmatched flexibility in responding to global demand 3 5.
The Rice of Industry: The Economic Lifeline of 30,000 Households in Northern Kaohsiung
Screws are known as the "rice of industry," the foundation of all industrial products. In Gangshan and Luzhu in northern Kaohsiung, this industry supports local prosperity.
| Quantitative Indicator | Data | Social Impact |
|---|---|---|
| Annual output value | Approximately NT$50-52.3 billion 7 | The core supporting northern Kaohsiung's metal-processing industrial chain |
| Employment | More than 30,000 workers 7 | Sustains tens of thousands of local households, forming a culture of "chairman villages" |
| Export share | U.S.-bound output accounts for about 90% of Kaohsiung fastener exports 8 | Highly tied to the U.S. market and greatly affected by geopolitics |
| Cluster scale | More than 700 factories within 20 kilometers 3 | The world's densest and fastest-responding fastener supply chain |
However, as the semiconductor industry has risen powerfully, the traditional screw industry has been squeezed on two fronts: talent and electricity. Under the halo of the sacred mountain that protects the nation, these hidden champions are experiencing a Dutch disease-like battle for resources. Kuo Chun-ting, second-generation operator of New Mould Screws, once said bluntly that people who grew up here might be hit by a screw while walking down the street, but young people now prefer to enter high-tech factories, leaving the succession of traditional industries under severe strain 2.
Westward Expansion, Financial Tsunami, and 50% Tariffs: The Screw Cluster at an Existential Crossroads
The history of Taiwan's screw industry has not been smooth. The wave of westward investment after 1995 allowed China to replace Taiwan as the top exporter by volume; the 2009 financial tsunami even led the Benjhou Industrial Park in Gangshan to be mocked for a time as a "mosquito hall," meaning an underused public facility 3.
But the most severe challenge came in 2025. The United States invoked Section 232 and imposed tariffs as high as 50% on steel and aluminum products. For Taiwan's screw industry, whose exports to the United States accounted for nearly 46%, this was undoubtedly a fatal blow 9 7. Many small and medium-sized factories could not bear the tariff costs, and their orders plunged to nearly zero, triggering the most serious wave of closures in recent years. Tu Kuang-ta, head of Huagang Village in Gangshan, lamented: "In my whole life, I have never seen the screw cluster's economy this bad. It is just too miserable!" 2
From "Selling by the Kilogram" to "Selling by the Piece": The Life-or-Death Race Toward Higher Value
Facing low-price competition and high tariffs, Taiwanese firms have been forced to accelerate their shift from standard parts "sold by the kilogram" to high-value-added products "sold by the piece." This is not only a technological upgrade, but also a thorough reconstruction of the business model.
- Aerospace engine fasteners: NAFCO is the only manufacturer in the Asia-Pacific certified by both GE and Safran. Aerospace-grade screws command extremely high unit prices and must withstand high temperatures and high pressure. In 2025, NAFCO benefited from the aerospace recovery, posting strong revenue growth and demonstrating the defensive strength of high-end markets 10.
- Medical dental implants: Anchor Fasteners applied precision screw technology to human implants, achieving a cross-sector leap from industrial components to medical devices 11.
- Green energy and wind power: As offshore wind power develops globally, high-strength, long-life wind turbine bolts have become a new blue ocean for Taiwanese manufacturers.
📝 Curator's note: This shift "from kilograms to pieces" is the clearest expression of the resilience of Taiwan's small and medium-sized enterprises. When cost is no longer an advantage, only irreplaceability can ensure survival. Taiwan's screw industry is trying to find, in the narrow spaces of the market, another hidden sacred mountain beyond semiconductors.
Net-Zero Transformation: The New Battlefield of the CBAM Carbon Tariff
Beyond geopolitics, the European Union's Carbon Border Adjustment Mechanism (CBAM), which will be formally collected in 2026, is another major hurdle. Screw fasteners are among the first wave of affected products. If manufacturers cannot provide carbon-footprint data, they will be taxed according to the EU's "default values" and lose competitiveness 12 13.
Taiwan's government has already invested a NT$25 billion transformation fund to help small and medium-sized enterprises pursue both digital and green transformation. Smaller factories have begun introducing AI carbon-inventory systems that connect carbon-footprint data with production systems. This culture of "fighting as a group" has continued into the digital age: through industrial alliances that conduct carbon inventories collectively and share carbon-reduction equipment, Taiwan's screw industry is trying to break through in the green transition.
Resilience and Culture: The Sustainability of Taiwan's Screw Spirit
Despite the dual pressure of 50% tariffs and carbon taxes, the story of Taiwan's screw industry is not over. In Gangshan, the Screw Museum records the history of this sector from Vietnam War hero to global hidden champion; inside factories, second- and third-generation successors are trying to redefine this traditional industry through AI and automation.
The story of Taiwan's screws began with resilience, and it will be continued through innovation. As this 20-kilometer cluster demonstrates: no matter how fractured the world becomes, as long as a single screw can tightly hold the value chain together, Taiwan's hidden champions will always have a place to stand.
References
- Trade Insight — Screw and Nut Industrial Clusters Look Globally Toward Renewal↩
- Business Weekly — One Taiwan, Two Fates: The Sacred Mountain That Protects the Nation Runs Hot While Non-Semiconductor Industries Wither; Tracking the Fight for Survival in the Kingdom of Screws↩
- Business Today — The Legend of Gangshan, the World's Largest Screw Cluster↩
- Fastener World — Revenue Rankings of Taiwanese Fastener Manufacturers, 2022-2024↩
- Liberty Times — Father of Screws Li Chun-yu Trained 70% of the Nation's Bosses↩
- Chun Yu Group — Company Profile and History↩
- Taiwan People News (Facebook) — Northern Kaohsiung's Kingdom of Screws Hits a Bottleneck: Output Value and Employment Data↩
- FTV News (Yahoo) — Share of Kaohsiung Screws Sold to the United States and Output Value↩
- Commercial Times — Rise of the Red Supply Chain Plus Heavy U.S. Section 232 Duties: Screw Industry Fears a Wave of Closures↩
- NAFCO Official Website — Specialized Manufacturer of Aerospace and High-End Industrial Fasteners↩
- CommonWealth Magazine — The Kingdom of Screws Opens a Medical Silicon Valley↩
- Taiwan Institute of Economic Research — From Carbon-Tariff Challenges to Low-Carbon Opportunities: How One Screw Factory Broke Through↩
- MII Metal Information Network — Promotion of Low-Carbon Practices and Carbon-Reduction Response Strategies for the Fastener Industry↩