Domestic Machine Tool and Parts See Rejuvenated Q4 Growth

With the machinery industry slowly seeing renewed growth after the year-long slump due to the coronavirus outbreak, domestic machine tool and parts firms Cheng Tai, AWEA Mechantronic, Tong Tai, He Da, Gao Feng, and Hiwin have all seen significant order increase in Q4.

Machinery firms expressed optimism regarding next year’s forecast, indicating a robust upward tick for 2021 revenue compared to this year. Taiwan’s machinery industry reported an export value at US$23.485 billion in the past eleven months, marking a 5.2% YoY slump, though industry watchers say the decline appears to be slowing down. For November, machine industry output reported US$2.416 billion, a 10.8% YoY uptick, and marked the third consecutive month for growth.

Taiwan Association of Machinery Industry Chairman Alex Ko said the vaccine distribution has helped ease the outbreak situation and introduced a strong market demand rebound. He expects to see growth next year to surpass this year’s numbers by at least 10%.

Aside from the vaccine helping matters, production has resumed in China and the U.S., and the disrupted global production chain has turned Southeast Asian countries into secondary production bases, contributing to regenerating industry growth. Still, Ko named the New Taiwanese Dollar exchange rate as the most significant variable.

For example, Tong Tai saw returning growth to machine tools, automotive, and PCBs in Q4. Demand was also buoyed by returning Taiwanese businesses, with a single quarter seeing order uptick by 10%. The firm has orders worth US$3.2 billion at hand, with order clarity deep into the upper half of 2021. Tong Tai expects 2021 to bear a better revenue outlook than this year.