Tawan's Machine Tool Industry Sees Upbeat Q3

Taiwan Machine Tool & Accessory Builders' Association (TMBA) Chairman Eric Chuo expressed his optimism for the island's machine-tool industry in the the third quarter (Q3) based on the strong growth in the first half (H1) of 2014 of most of the local manufacturers and rising demand for intelligent automation worldwide.

According to the Customs Office, throughout H1 Taiwan shipped US$1.81 billion of machine tools, up 4.9% year on year. In June alone, Taiwan's machine tool shipments came to US$352 million, up 13.3% YoY to return to the peak of 2012.

The Taiwan Association of Machinery Industry (TAMI) ascribed the brisk export growth in June mostly to the increased shipments to China, the largest export destination for Taiwan's machine tools, with shipments to Italy, Russia, Germany, and the United States up 65%, 60%, and 42%, respectively.

Chuo, also chairman of the precision-components maker Hiwin Technology Co., Ltd., says that such brisk growth is driven by surging demand for intelligent automation, seen by operators as the way to cope with rising labor cost globally. Machine tools and robotic arms are essential to intelligent automation systems.

Many of the island's leading machine-tool makers still have ample undelivered orders to keep production lines humming throughout Q3 or even the final quarter, says Chuo.

Hiwin, Chuo says, will see sales further grow in H2 of this year over the first half and that of 2013. In July this year, the company signed a deal to co-develop industrial robots with the embedded-computer maker, Advantech Corp. Chuo projects robots to account for around 10% of corporate revenue by the end of this year. His company shipped over 100 robots in July, higher than expected.

Tongtai Group still has NT$2.3 billion (US$76.6 million) of unfilled orders, and Goodway Group around NT$2.2 billion (US$73.3 million). Goodway executives say the group's unfilled orders, mostly from automobile, aircraft and energy industries, will keep its production lines busy throughout this year. (KL)

Taiwan's leading machine-tool makers and  H1, 2014 revenue

Stock code	Company	H1, 2014 revenue	YoY change (%)
1583	Goodway	NT$3.5bn	26.9
4526	Tongtai	NT$4.3bn	22.2
4510	Kao Fong	NT$1bn	12.1
4513	Falcon	NT$1.1bn	19.7
2049	Hiwin	NT$6.5bn	26.5

Source: Taiwan Stock Exchange Corp.