Machine-tool Firms Worry About Aftershock of U.S. Debt Issue in Q4

Taipei, Aug. 9, 2011 (CENS)--Despite promising influx of orders, Taiwan's leading manufacturers of machine tools, including Victor Taichung Machinery Works Co., Yeong Chin Machinery Industries Co., Leaderway Machinery Co. and Palmary Machinery Co., worry about the aftershock from the U.S. debt issue among others in the fourth quarter of this year.

In the first seven months, domestic leading machine-tool manufacturers' sales grew over 30% and are still receiving orders, whose status in the fourth quarter may be impacted by a slowdown in Europe due to the spreading debt problem and fast development of South Korean counterparts, says an insider.

Leadway president C.C. Chang said exports for the domestic machinery industry grew over 30% year-on-year to exceed US$10 billion in the first half due to recovering demand in China, the EU, U.S. and Association of Southeast Asian nations (ASEAN).

Nevertheless, domestic leading machine-tool firms are impacted by the sharp appreciation of local currency against the greenback and the shortage of key components as CNC (computerized numerically controlled) devices, cast iron and balls screws that are cutting profit margin.

Shortages of key components is delaying lead-time among many domestic machine-tool firms by two months or more, hence forcing some foreign buyers to place orders with more than one domestic manufacturers to impact repeat orders.