Slumping machinery exports in Taiwan reach a new low of 5.1% according to a report.
In a significant shift in Taiwan's export landscape, the share of machinery in total exports has been on a steady decline since the 2000s. Once accounting for 8.5% of the nation's total exports, the share reached a record low of 5.1% in 2022.
This decrease is attributed to several factors, including global market dynamics, the loss of preferential tariffs, and the economic downturn in Europe. Chinese dumping in the international market and the end of preferential tariffs for Taiwanese machinery by China have significantly impacted the industry, leading to increased competition and lower prices.
However, the story is not entirely bleak. While the overall machinery sector has faced challenges, there has been a notable increase in exports to certain regions, notably the United States and Japan, which have supported growth in machinery exports during the first half of 2023. The US share of Taiwanese exports rose to 24.2%, from 19.9%.
In contrast, the categories of electronics components and information, communications, and audio-video products have been growing rapidly, shifting the industrial structure of Taiwan. These categories have become major contributors to Taiwan's exports, with electronics components accounting for 37.3% and information, communications, and audio-video products accounting for 27.9% of total exports.
The machinery sector, specifically semiconductor machines, has shown a positive trend in recent years. Exports of machines for semiconductor manufacturing increased significantly in the past few years, exceeding the US$5 billion mark for the first time in 2022. Despite a 16.8% drop in total machinery shipments to China, including Hong Kong, from 2019 to last year, the US saw a 24.5% increase in machinery exports over the past five years, surpassing China for the first time.
Looking ahead, the outlook for the machinery sector remains uncertain due to US-China trade tensions and geopolitical conflicts, which are causing delays in infrastructure and reconstruction projects. China, once the largest buyer of Taiwanese machinery, has seen its share drop below 30% in the past two years, with ASEAN countries, especially Singapore, accounting for more than 20% of Taiwan's total exports in the machinery sector.
In conclusion, while the machinery sector in Taiwan has experienced a decline, there are signs of growth and shifting trends in the industry. The focus on semiconductor machines and the increasing demand in the US and Japan offer promising opportunities for Taiwan's machinery exports.
[1] Source: Taiwan's Ministry of Economic Affairs [2] Source: Taiwan External Trade Development Council (TAITRA) [3] Source: Taiwan's Bureau of Foreign Trade [4] Source: Focus Taiwan News Channel
- The decline in Taiwan's machinery sector exports has led to a surge in exports to other categories, particularly electronics components and finance, with the latter accounting for an increased percentage in total exports.
- The shift in Taiwan's industrial structure is evident, as industries like semiconductor manufacturing, which fall under the machinery sector, show promising growth, especially in finance sectors in countries like the US.
