Taiwanese Die and Mold Industry Recovers on Growing Demand
2011/04/08 | By Steve ChuangA stronger-than-expected recovery in Taiwan's automotives and electronics industries boosted the island's die and mold production to NT$45 billion in 2010, up 17% from 2009 but still under the pre-recession level of 2008, according to the statistics published by the ITIS (Industry & Technology Intelligence Services) Project of the Metal Industries Research & Development Centre (MIRDC).
The industry exported NT$17.8 billion worth of dies and molds last year while importing NT$4.7 billion worth, up 14.9% and 23.2%, respectively, from a year earlier. The domestic market was also up, expanding 19.2% to NT$32 billion.
After several quarters of rapid growth, however, the trend reversed in the fourth quarter of 2010 as output declined 5.7% quarter-on-quarter to NT$11.88 billion. During that quarter the industry exported 1.0% and imported 4.3% less than in the third quarter, and domestic demand dropped 7.8% to NT$8.52 billion.
ITIS analysts explained that the overall decline was attributable partly to economic slowdowns in China, the U.S., and Europe, and partly to seasonal factors that caused local downstream industries to reduce purchases of dies and molds.
Brighter Prospects
The upward trend for the industry is expected to resume this year, as the IMF (International Monetary Fund) has projected an improved global growth rate of 4.4%. Nevertheless, economic uncertainties in advanced countries, especially EU members, will cause a growth slowdown this year, ITIS analysts stated.
The analysts also noted that emerging Asian economies such as China, India, Vietnam, Indonesia, and the Philippines, where strong GDP growth and rapid infrastructure development will sustain the global market for dies and molds in the coming years, will benefit the industry. This is especially true for Taiwanese suppliers who, along with counterparts in Singapore, Malaysia, and China, command the lion's share of the Asian market.
The signing of the Economic Cooperation Framework Agreement (ECFA) between Taiwan and China in late June 2010 and its implementation this year are also likely to benefit Taiwanese die and mold manufacturers, noted the ITIS analysts. The agreement makes China's huge domestic market more accessible, they explained, and some Taiwanese suppliers have already tried to tap the supply chains of large Chinese enterprises more actively than before. However, they admitted, whether ECFA will bring benefits in the short term remains to be seen.
The achievements of Taiwan's die and mold makers in improving their manufacturing technology will give them a solid basis on which to compete globally this year, said the ITIS analysts. For example, Seiyu Green Technology, a Taiwanese plastic-injection supplier, has made a significant breakthrough in mold-development technology for biodegradable PLA (Polylactic Acid) plastic, providing greater durability and a lower defect rate. ITIS noted that this cutting-edge molding technology will accelerate the use of eco-friendly plastic housings in 3C products, and will boost Taiwan's die and mold industry to a higher position in the future.
The industry's production value is projected to grow by 5-10% to NT$48.5 billion this year, with exports and imports reaching NT$19 billion and NT$5 billion, respectively.
Output of Taiwan's Die and Mold Industry Unit: NT$ billion | |||||||
| 2009 | Q4, 2010 | 2010 | 2011 | |||
Value | Value | Q-on-Q Change | Value | Y-on-Y Change | Value | Y-on-Y Change | |
Output | 38.47 | 11.88 | -5.7% | 45.0 | 17.0% | 45.8 | 5-10% |
Exports | 15.47 | 4.58 | -1.0% | 17.8 | 14.9% | 19.0 | 5-10% |
Imports | 3.82 | 1.22 | -7.8% | 4.7 | 23.2% | 5.0 | 3-5% |