Machine tool makers fear pessimistic market

The Taiwan Machine Tool & Accessory Builders' Association held a general member meeting on Oct. 14, which saw the attendance of major machine tool brands in Taiwan.

Top machine tool supplier Hiwin Group President Cho Yung-tsai pointed out that although the market demand in mainland China has slowed down recently, the orders received in Europe, America, Japan and other regions all showed considerable growth. He added that revenue might not be as optimistic as in Q3, but double-digit growth could still be on the table for the entire year.

Goodway Group Chairman Yang De-hua, the chairman of another notable machine tool manufacturer, said that the proportion of Goodway's revenue in the Chinese market has dropped from 50% last year to about 40% this year. The demand in other regions, such as Europe, America, and Turkey, remains relatively high. Demand from both sides of the Taiwan Strait has declined, and this year's revenue amounts to around NTD$6.5 billion to NTD$6.7 billion, the same as last year at a slight decrease.

Cho said that Hiwin maintains a significant advantage due to smart manufacturing and smart automation, making the company less reliant on the Chinese market. Currently, the average order for ball screws and linear slides is on hand for two months, some linear slides are on hand for one and a half months, and the orders for industrial robots are at full capacity until the end of the year.

Cho believes that the domestic machine tool industry will not look so optimistic due to factors such as China's power cuts, the pandemic and inflation, and the U.S. economy's likelihood of seeing negative growth this year.

Hiwin's consolidated revenue in September was NTD$2.511 billion, impacted by factors such as inflation and resulting in revenue decreasing by 4.4% month-on-month and 0.4% year-on-year, the lowest in the past seven months. Overall, the consolidated revenue in the third quarter was at NTD$7.92 billion, a quarterly decrease of 3.8% and an annual increase of 5.18%. On the other hand, the accumulated revenue in the first three quarters was NTD$23.723 billion, an annual increase of 15.3%.

Yang pointed out that Goodway Group's companies Goodway and AWEA are also at full capacity regarding orders up until January next year. In terms of orders in hand, Goodway Tai slightly rebounded to NTD$1.2 billion, and the delivery period of Awai is about 1.7 billion to 1.8 billion yuan.

Yang said that the market is more pessimistic about the second half of 2022 and the next year, but even though the economy is not as optimistic, he pointed out that there is still room for growth, and there is no need to be pessimistic. He also suggested that the export of Taiwanese products should be diversified rather than focusing on one specific market. If it is too concentrated on the Chinese market, for instance, exports will be greatly affected by city closures in China and the pandemic. In the future, Yang looks to the ASEAN region and India as markets worthy of development.