Taiwan's Machine-tool Production Fully Booked in Q2

Thanks to the effects of the cross-Taiwan Strait Economic Cooperation Framework Agreement (ECFA) and the shifting of orders from Japan because of the massive damage wrought by the recent earthquake and tsunami there, Taiwan's leading manufacturers of machine tools have their production lines fully booked for the second quarter of this year, according to a survey conducted by the Taiwan Association of Machinery Industry (TAMI).

Both the Goodway Machine Corp. and Fair Friend International Corp. report that they will ship more products in the second quarter than the first, and institutional investors believe that both companies will see a quarter-to-quarter growth of more than 20% in the second quarter.

The Awea Mechantronic Co., a member of the Goodway Group, says it has received enough orders to keep its production lines humming for over six months, with orders for large-sized machining centers enough to occupy production through the end of this year. The company currently has over NT$1.6 billion worth of orders in hand.

Awea's Taichung No. 2 plant will kick off mass production in June, concentrating on the production of vertical machining centers with monthly output worth NT$50 million.

Goodway's parent says it has over NT$1 billion worth of orders in hand, and group chairman Edward Yang claims that the company can ship more than NT$100 million worth of machine tools to Japan per year. The company expects to receive more orders shifted from Japan in the second quarter.

Positioned as the largest producer of full-function machining centers on either side of the Taiwan Strait, Fair Friend received orders for over 4,500 machines in the first quarter of this year, 2,600 of them from China and 1,500-odd from Taiwan. The company received orders worth more than NT$9.2 billion in the first quarter of this year, up a whopping 85% year-on-year, and the flood of orders is expected to continue swelling in the second quarter.

The Fair Friend Group is expanding its production capacity in both Taiwan and China, and has just completed an expansion of its Xiaoshan No. 2 plant in Zhejiang province, China. This project boosts the plant's monthly output to 300 machining centers, up from 200 in the past.

This month (April) the company will launch mass production at its Jiangdong Industrial Park in Zhejiang province with a monthly capacity of 300 machining centers. Jimmy Chu, chairman of Fair Friend, says that his company will see shipments in the second quarter grow over 30% from the previous three-month period.

The Tongtai Machine & Tool Co., one of Taiwan's leading manufacturers of special-purpose machine tools and PCB (printed circuit board) drilling machines, reports that it has recently received orders for 340 machining centers from an electronics manufacturer, with shipments between May and August.

Tongtai notes it will begin shipping newly developed laser PCB drilling machines sometime in the present quarter. The company predicts that it will ship over 80 of laser PCB drilling machines valued at NT$1.2 billion each year.

Institutional investors believe that Tongtai's March sales very likely reached NT$360 million, and that sales in April and May will top NT$400 million and NT$500 million, respectively. The company predicts 2011 sales of more than NT$7.6 billion, up 15% over last year, and after-tax earnings per share of NT$4.66.

Orders shifted from Japan will help Hiwin Technologies Corp., Taiwan's largest manufacturer of ball screws and linear guideways, achieve record sales of more than NT$1 billion in March.

At present, Hiwin has enough orders in hand to keep its production lines fully occupied through the end of the third quarter. To meet strong demand from customers worldwide, in the second quarter of this year the company began expanding production at plants in the Taichung Precision Machinery Park, Yunlin Science Park, and a Tanzi plant in Taichung.

Institutional investors predict that Hiwin has a good chance to set an all-time record of NT$1.2 billion in monthly sales in the second quarter of this year.

Orders Received by Taiwan's Leading Machine-tool Firms
Company	Orders in Hand (NT$1 billion)
Awea Mechantronic	1.6
Goodway Machine	1.0
Hiwin Technologies	7.0
Kao Fong Machinery	0.75
Tongtai Machine & Tool	3.4
Shieh Yih Machinery	1.6
Fair Friend Group	9.2
Source: Respective Firms