The nation’s machine toolmakers must upgrade their products to compete against Japanese rivals as Japan’s currency continues to decline, Taiwan Machine Tool and Accessory Builders’ Association secretary-general Carl Huang (黃建中) said yesterday.
“We did not expect the yen to depreciate so much... The weaker yen poses a great threat to Taiwan’s machine tool industry,” Huang told the Taipei Times by telephone.
Japanese products had been more expensive than Taiwanese products, which gave domestic products a price advantage in overseas markets, Huang said.
However, as the yen continues to decline against the US dollar, Taiwanese firms are now facing price competition from their Japanese peers.
On Monday, Hiwin Technologies Corp (上銀) chairman Eric Chuo (卓永財) said the yen’s depreciation would have a greater impact on Taiwan’s machine tool industry than the new free-trade agreement between China and South Korea.
“Taiwanese firms’ major rivals in the high-end machine tool industry are Japanese firms, not South Korean,” Chuo told an investors’ conference.
The company estimated the yen would further depreciate to between ￥120 and ￥125 per US dollar.
Last month, Taiwan’s machine tool exports totaled US$317 million, up 5 percent year-on-year, but down 0.5 percent from September, according to the association’s tallies.
Exports to China — the biggest export destination for Taiwanese goods with a 34.4 percent share — reached US$109.59 million last month, up 15.7 percent from last year’s US$94.72 million and up 13.3 percent from the previous month’s US$96.7 million.
Shipments to the US — the No. 2 export destination for Taiwan’s products with a 11 percent share — increased 9.5 percent year-on-year and 23.7 percent month-on-month to US$39.86 million last month, the tallies showed.
Turkey, which accounts for 5.6 percent of Taiwan’s machine tool exports, saw shipments drop 16.9 percent from a month earlier to US$16.1 million. However, the figure rose 7.3 percent from last year.
“The sluggish economy status in Europe more or less affected Taiwan’s machine tool industry,” Huang said, adding that last month exports to Germany also declined 0.6 percent month-on-month to US$12.02 million.
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