Taipei-The production value of Taiwan's machinery industry will grow about 4 percent in 2020, boosted by rising demand from overseas Taiwanese manufacturers returning home to avoid tariffs on Chinese-made goods, a government sponsored institute said Friday.
The Industrial Technology Research Institute (ITRI) estimated at an industrial development forum that the value of the output of Taiwan's machinery sector will grow 4 percent in 2020 from an anticipated NT$1.06 trillion (US$34.75 billion) for 2019.
Hsiung Chih-min (???), a manager of ITRI's Industrial Economics and Knowledge Center, said the global trade war has led many Taiwanese firms to return home to invest, and the impact on machinery demand of that trend should become more obvious in the second quarter of 2020.
The expected gains in 2020 will also be the result of a relatively low base of comparison in 2019, when production value will likely end up down around 9 percent from 2018 because of falling demand caused by the trade war, Hsiung said.
Hsiung believed, however, that the 4 percent increase would be at the upper end of the growth range.
The industry has been especially hurt by falling exports in 2019, which are critical in driving the production value of Taiwanese machinery makers because exports account for more than 70 percent of Taiwan's total machinery sales, Hsiung said.
According to Ministry of Finance figures, Taiwan's machinery exports were down 8 percent from a year earlier in the first nine months of the year.
That decline was prompted in large part by falling demand from China.
China's total machine tool imports from January to August were down 39.2 percent from a year earlier, while its imports of equipment for making semiconductors, flat panels and rubber/plastics items also fell 17.1 percent, 27.9 percent and 10.3 percent, respectively.
In the longer term, Hsiung said, Taiwan's machinery sector should benefit from the rising demand for automation and smart production.
Taiwanese machinery makers should also capitalize on the growing popularity of emerging technologies, such as artificial intelligence and 5G applications, to develop products that meet the needs of a wide range of sectors, including the logistics and food sectors, Hsiung said.
Source: Focus Taiwan News Channel