Plummeting Korean Won Impacts Taiwan's Machine-tool Exports
2008/10/27 | By Ben ShenTaipei, Oct. 27, 2008 (CENS)--The steady decline in the Korean won against the greenback has impacted Taiwan's machine-tool industry to export high-value-added double-column machining centers to South Korea.
Moreover, machine-tool manufacturers in Taiwan also struggle with underselling from South Korean exporters in the world marketplace. Faced with serious threat from South Korean competitors in the low-price machine-tool segment, the Taiwan Association of Machinery Industry (TAMI) urged domestic firms to upgrade products to compete with Japanese counterparts in the medium and high-price machine-tool segments worldwide.
South Korea mainly exports CNC lathes and machining centers, the same as Taiwan's machine-tool manufacturers. But the latter, most being small and medium sized, cannot compete with South Koreans for they are heavily subsidized by its government in global exports.
As South Korea has yet to tap the large-sized machine tool segment, Taiwan manufacturers of large-sized double-column machining centers, like Awea Mechantronic Co., She Hong Industrial Co., Kao Ming Machinery Co. and Vision Wide Tech Co., stand a better chance to access such market. However Taiwan suppliers have recently been challenged to access that market due to compromised purchasing power there resulting from the sharply depreciating South Korean currency.
An Awea executive noted that over the past several years his firm has seen waning orders for double-column machining centers from South Korea's manufacturers of TFT-LCD (thin film transistor-liquid crystal display) and 3C (computer, communications, consumer electronics) sectors.
TAMI vice president C.C. Wang said South Korea is among Taiwan's top-10 machine-tool export outlets: Taiwan saw a 19% year-on-year growth in exports of machine tools to South Korea in the first seven months. But Wang admitted the exports to South Korea have plummeted in August, September and will have in October due to stagnant procurement power.