Taiwan's Machine Tool Makers See Order Surge
2013/11/18 | By Ken LiuTaiwan's machine-tool makers are being flooded with orders from Europe, and some of them are fully booked into the first quarter of 2014 with orders ranging from NT$500 million (US$16.6 million at NT$30: US$1) to NT$1.75 billion (US$58.3 million) in value.
Industry executives say that although the European economy has not recovered the vibrancy it enjoyed prior to the sovereign debt crisis, procurement sentiment at the EMO 2013 machine tool show, which was held on Sept. 16-21 in Hannover, was much stronger than seen at the previous show in 2011.
European manufacturers in the aerospace, medicine, railway-engineering, and automotive industries, the executives say, have begun resuming purchases of machine tools and parts. Electronics manufacturers are the exception.
Taiwan's leading machine-tool makers—including Hiwin Technologies Corp., Fair Friend Group, Victor Taichung Machinery Works Co., Tongtai Machine & Tool Co., Yeong Chin Machinery Co., Goodway Machine Corp., Awea Mechantronic Co., Kao Fong Machinery Co., Falcon Machine Tools Co., Shieh Yih Machinery Industry Co., and Taiwan Takisawa Co.—have all experienced a surge in orders from European buyers.
Tongtai executives report that their company has NT$1.75 billion (US$58.3 million) worth of orders on hand in addition to the NT$300 million (US$10 million) worth recently placed by European buyers.
Victor Taichung executives say a steady influx of orders indicates that the company's business has stopped deteriorating. Undelivered orders are staying in the range of NT$1-1.3 billion (US$33.3-43.3 million) and deliveries are running at NT$400-500 million (US$13.3-16.6 million) a month, encouraging a cautious optimism about the market outlook.
Falcon officials say that their revenues for September approached NT$200 million (US$6.6 million). The company's American subsidiary predicts that its monthly revenue will rise to around NT$2.3 million (US$76,666) in the fourth quarter, compared with an average of NT$1.55 million (US$51,666) in the third quarter.
The company will make NT$100 million (US$3.3 million) worth of deliveries of automated equipment to mainland Chinese wheel-rim makers in October and November. Its mainland factory started generating revenue again in October, after a move from Shanghai to Changshu, and its machining centers and manually operated grinding machines are expected to generate revenue of around RMB10 million (US$1.6 million at US$1:RMB6.1) a month.
Falcon has around NT$500 million (US$16.6 million) worth of undelivered orders in hand, enough to keep production lines humming for at least three months, and is seeing its monthly consolidated revenue return to the NT$300 million (US$10 million) level.
Taiwan Takisawa executives point out that the company's primary shareholder, Takisawa Machine Tools of Japan, continues sending the Taiwan company orders for small CNC lathes without control units despite unfavorable changes in the exchange rate. The Taiwan company's shipments have returned to a level of over 100 systems a month in the third quarter, pushing its monthly revenue to over NT$200 million (US$6.6 million), and orders in hand will keep the company's production lines busy for at least two to three months.
September Revenue of Taiwan's Machine Tool Makers
Company | Revenue | YoY Increase (%) |
Hiwin | NT$1.2bn | 19.28 |
Tongtai | NT$ | 7.92 |
Shieh Yih | NT$ | 143.69 |
Goodway | NT$ | -11.56 |
Victor Taichung | NT$ | 7.28 |
| NT$ | 17.74 |
Awea | NT$ | -25.01 |
| NT$ | -8.79 |
Falcon | NT$ | -22.68 |
Kao Fong | NT$ | 40.09 |
Roundtop | NT$ | -31.84 |
Source: The companies