Machinery exports exceeded one trillion yuan in the first ten months! The whole year is expected to reach a new high, but there are still two major variables

Exports of machinery in the first ten months exceeded 1 trillion yuan. (Photo by reporter Lin Jinghua)

[Reporter Lin Jinghua/Taipei Report] Taiwan’s machinery exports are expected to set a new record this year! Benefiting from the booming demand for AI and semiconductors, machinery exports continue to heat up. In the first ten months, the export value has exceeded 1 trillion yuan, an annual increase of 24.4%. It is only about 3.1 billion U.S. dollars away from the annual historical high of 34.7 billion U.S. dollars set in 2022. The Machinery Association is optimistic about continued growth in the fourth quarter and is expected to set a new record for the whole year. However, machine tool exports are still affected by the appreciation of the New Taiwan dollar relative to the Japanese yen and Korean won. International geopolitics and changes in the US AI policy have also added uncertainty, becoming the two major variables in the follow-up of machinery exports.

The Machinery Association released a quick report on export statistics on the 10th. Machinery exports in October were US$3.593 billion, an annual increase of 35.0%. Calculated in New Taiwan dollars, it was 114.764 billion yuan, an increase of 41.5% over the same period last year. The value of machinery exports in the first ten months was US$31.572 billion, an increase of 21.8% over the same period last year. It was valued in New Taiwan dollars at approximately 1,003.071 billion yuan, an increase of 24.4% over the same period last year.

Looking at the detailed items, the top three machinery export values ​​in the first ten months were electronic equipment, inspection and measuring equipment, and power transmission parts. In the first ten months, the top three machinery exporting countries were the United States with US$8.292 billion, accounting for 26.3%, China with US$6.729 billion, accounting for 21.3%, and Singapore with US$2.339 billion, accounting for 7.4%.

The Machinery Association pointed out that driven by strong overall machinery export orders, exports are expected to continue to grow positively in the fourth quarter, and exports throughout the year will exceed the historical high in 2022 and set another record high. However, machine tool exports rebounded and grew by 18.5% in October, with export value reaching US$167 million. Exports in the first ten months were US$1.659 billion. The annual decrease narrowed to 0.2%, which is close to the level of the same period last year. However, the growth in October partly reflects the low base period of the same month last year. The monthly export volume has not reached 200 million US dollars, and is still affected by the exchange rate. Observing exchange rate changes in the past six years, the New Taiwan dollar exchange rate has depreciated by 15.68%, while the Japanese yen has depreciated by as much as 53.20%. The difference between the two is as high as 37.52%. In addition, the cumulative depreciation rate in South Korea has also reached 23.35%, and the exchange rate difference continues to affect Taiwan's machine tool export competitiveness.

Currently, the war in the Middle East continues, and energy and raw material prices are still affected. Geopolitical conflicts and various countries' export controls, such as high-tech controls and rare earth controls, continue to disrupt the global supply chain. The results of the U.S. midterm elections have also seen major changes. The Democratic Party controls both the Senate and the House of Representatives, which has planted the possibility of slowing down the future development of AI. Although the possibility of a "snap freeze" in AI investment in the short term is not high, the rising costs of data center land, power acquisition and review may make the pace of some U.S. capital expenditures more cautious, thus affecting the order visibility of AI servers and semiconductor equipment. The follow-up still needs to be closely observed.

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