The production value of the nation’s machine tool industry is forecast to grow by 20 percent to 30 percent on an annual basis next year, as local firms have better order visibility into the second quarter of next year, Taiwan Machine Tool and Accessory Builders’ Association (台灣工具機暨零組件公會) chairman Habor Hsu (許文憲) said yesterday.
With a noticeable uptick in demand from the US and Europe this quarter, a production value increase of up to 30 percent is achievable next year, Hsu said.
Increased demand from the two markets would make up for softness in Chinese demand, he said.
Photo: Lin Jin-hua, Taipei Times
However, high commodity prices are here to stay, Hsu said, anticipating that prices of raw materials would remain high for the next three years amid US-China trade tensions, the lingering COVID-19 pandemic and supply chain bottlenecks.
This year, the industry has faced challenges such as unfavorable exchange rates, logistics bottlenecks, and labor and component shortages, Hsu said.
From January through last month, machine tool exports totaled US$2.25 billion, up 27.6 percent year-on-year, data compiled by the Taichung-based association showed.
By product breakdown, exports of metal-cutting machines grew 27.4 percent year-on-year to US$1.86 billion, while metal forming machines rose 28.6 percent to US$381 million, association data showed.
Some positive developments are expected to boost the sector next year, such as a rebound in global demand, but unfavorable exchange rates would remain a main challenge for local producers, he said.
The government should keep a close eye on the exchange rates of the New Taiwan dollar to yen and won, as Japan and South Korea are Taiwan’s main competitors in the industry, he said.
The government should help stabilize the exchange rates with the two countries and China, Hsu said, adding that it should do so cautiously, as inept policies might lead to currency manipulation charges.
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