Taiwanese machinery manufacturers facing US tariff challenges and unfavorable exchange rates must provide customized products or services to secure orders and regain customer loyalty, a Taiwan Association of Machinery Industry (TAMI) official said yesterday in Taichung.
“Taiwan’s machinery export market is shrinking,” the Chinese-language Liberty Times (the Taipei Times’ sister newspaper) quoted TAMI secretary-general Hsu Wen-tung (許文通) as saying on the sidelines of an international forum marking the 80th anniversary of the establishment of the association.
“We can no longer rely on price-performance ratios and after-sales services to retain customers, as exchange rate fluctuations pose a greater disadvantage to our products... Differentiation and customization are needed to attract customers and make it impossible for rivals to compete,” Hsu said.
Photo: Huang Hsu-lei, Taipei Times
For instance, some companies said that order visibility for customized semiconductor, woodworking and food machinery is clear through the first or the second quarter of next year, reflecting their still high international visibility and limited impact by exchange rate changes, he added.
From January to last month, Taiwan’s machinery exports reached US$23.26 billion, an annual increase of 6.6 percent. In New Taiwan dollar terms, the total was NT$725.07 billion, up 3.8 percent, the association’s data showed, an indication that the NT dollar’s appreciation this year has eroded the real growth of export value.
Taiwan’s price advantage — with machinery equipment priced 20 to 30 percent lower than Japanese products — has effectively disappeared, as from 2021 to Oct. 8, the NT dollar depreciated only 7.4 percent, compared with the yen’s 48.1 percent plunge, the association said in a statement.
Given unfavorable exchange rates, “Japan’s high-end products are almost all cheaper than Taiwan’s,” Hsu said.
A stronger NT dollar has an even greater impact than US tariffs, with the effect especially evident in machine tool exports, the association said.
From January through last month, Taiwan’s machine tool exports totaled US$1.52 billion, down 6.4 percent from US$1.63 billion for the same period last year, association data showed.
While competing with Japan and South Korea on the high-end segment, Taiwan’s machinery makers also compete with Chinese firms on the low to middle end.
However, after Chinese firms’ aggressive international expansion over the past few years and a spree of acquisitions of many European and US companies, the quality and output of Chinese products have increased rapidly, Hsu said.
In particular, China’s low-priced steel — only one-third of Taiwan’s — and lower production costs are also making it difficult for Taiwanese makers to compete with their Chinese peers in Southeast Asia, he said.
Speaking at the international forum, Vice Minister of Economic Affairs Ho Chin-tsang (何晉滄) said the Legislative Yuan on Friday passed the Executive Yuan’s special resilience budget, which includes a NT$46 billion (US$1.5 billion) spending plan proposed by the Ministry of Economic Affairs to help local industries bolster their resilience and competitiveness.
The ministry would step up efforts to help companies in terms of financial support, technology upgrading and talent development, as well as assist them in integrating artificial intelligence into their operations and entering global supply chains, Ho said.
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
The Fair Trade Commission’s (FTC) ongoing review of Grab Holdings Ltd’s US$600 million acquisition of Foodpanda Taiwan’s operations, announced on March 23, has taken on fresh urgency as industry experts warn that the transaction could embed significant Chinese cybersecurity vulnerabilities into Taiwan’s digital infrastructure through Grab’s deep ties to autonomous-driving firm WeRide (文遠知行). Less than 16 months after the FTC blocked Uber Eats’ direct attempt to acquire Foodpanda Taiwan — citing potential combined market shares of 80 to 90 percent — the emergence of Grab as the buyer has prompted questions about whether the same competitive harm is simply being rerouted
The list of Asian stocks that benefit from business partnership with Nvidia Corp is getting longer, as the region further integrates into the artificial intelligence (AI) chip giant’s business ecosystem. Just in the past week, South Korea’s LG Electronics Inc, Taiwan’s Nanya Technology Corp (南亞科技), as well as China’s Huizhou Desay SV Automotive Co (德賽西威) and Pateo Connect Technology Shanghai Corp (博泰車聯) have become the latest to rally on news of tie-ups, supply-chain participation or product collaboration with the US chip designer. Asian suppliers account for about 90 percent of Nvidia’s production costs, up from about 65 percent last year, data compiled
RSS