CommonWealth Magazine’s Top 2000 Enterprises Survey: In 2023, the Machine Tool Industry Demonstrates Strong Industrial Resilience.

Huang Ya-Ching, Project Manager, Precision Machinery Research & Development Center

The traditional machine tool industry has primarily served the automotive sector, accounting for over 40% of its applications, with significant demand for machines and diverse models. However, in recent years, rising awareness of sustainability and environmental protection, along with trends toward energy efficiency and net-zero carbon emissions, have shifted the global automotive industry’s focus from fuel-powered vehicles to electric vehicles (EVs). This transformation in end-user industries has also impacted related supply chains, driving diversification toward aerospace, electronics/semiconductors, and new energy sectors. Equipment design and technology are evolving toward larger-scale, smarter, low-carbon, and highly customized solutions, complemented by professional technical consulting and integrated solutions. Challenges bring opportunities—Taiwan’s machine tool industry should seize this moment to develop highly customized processing equipment and comprehensive solutions, fostering innovation to unlock new business prospects.

Driven by changes in end-user industries, machine tool manufacturers are actively adjusting product designs to meet demands for EV battery and power system component processing, wafer manufacturing (cutting, grinding, polishing), and packaging/testing equipment. By integrating low-carbon and smart technologies, the industry is advancing energy-efficient, intelligent machinery and smart manufacturing to support EV and semiconductor growth, reversing the downturn in market conditions.

As the global pandemic came under control, economic activity rebounded in 2022, with industrial demand recovering and equipment investment gradually increasing. However, ongoing international conflicts, geopolitical tensions, and currency fluctuations have dampened the pace of global manufacturing recovery. Taiwan’s machine tool industry emerged from the pandemic slump in 2021, but geopolitical factors caused exports to decline in 2023 to $2.599 billion, down 14% from 2022. Metal-cutting machine exports totaled $2.204 billion (down 13.3%), while metal-forming machines reached $395 million (down 17.7%).

According to the 2024 CommonWealth Magazine 2000 Largest Corporations Survey, 1,351 Taiwanese manufacturers made the list in 2023, but overall performance declined significantly. Average revenue fell 9.21% year-over-year, average profit margin was 6.20%, return on equity averaged 9.47%, and debt ratio averaged 41.72%, all lower than the previous year. Within the machine tool and components sector, 60% of listed companies dropped in ranking, while 40% moved up. Revenue declined for 70% of companies, though 30% showed gradual growth.

Machine Tool Components

In the revenue ranking for machine tool components, HIWIN Technologies posted consolidated revenue of NT$24.633 billion in 2023 (manufacturing rank: 160), down nearly 16% year-over-year. Despite sluggish demand in 2022, rigid demand from automation applications in new energy, lithium batteries, aerospace, and EV sectors is now driving short lead-time shipments, with order visibility of 2.5–3 months, suggesting potential revenue growth in 2024. Major transmission component makers Global Motion Technology (rank: 825) and Chieftek Precision (rank: 1329) faced weaker-than-expected recovery in China and intensified competition due to yen depreciation, with revenues of NT$2.571 billion and NT$1.075 billion, down 23.8% and 34.29%, respectively. Precision spindle maker Jin Chiun Industrial rejoined the list (rank: 1254) with NT$1.199 billion in revenue, up 1.6%, supported by stable orders and new wafer-cutting spindle products entering mass production.

Machine Tool Assemblies

Most machine tool manufacturers saw revenue and rankings decline, averaging a 20% drop. Examples include Tongtai Machine & Tool (rank: 408, down 7.84%), Taichung Machine Tool (rank: 447, down 13.15%), Cheng Tai Machinery (rank: 516, down 16.7%), and others. Some firms, however, improved rankings despite revenue dips, such as Chin Fong Machine (rank: 436, down 3.43%) and SEYI Machinery (rank: 686, down 1.44%).

A few companies rebounded strongly, restoring pre-pandemic levels by 2023: Anderson Industrial (rank: 641, up 2.48%), Buffalo Machinery (rank: 804, up 7.24%), Oilgear Taiwan (rank: 857, up 5.15%), and Rong Tian Precision (rank: 1186, up 33.76%), benefiting from wind power and aerospace recovery, as well as rising hydrogen energy demand for high-pressure storage equipment.

Outlook for 2024

For Taiwan’s machine tool industry, 2024 presents both challenges and opportunities. Global economic slowdown, U.S.-China trade friction, and inflation pose risks, yet emerging markets like India, Vietnam, and Mexico offer new growth prospects. Carbon tariffs in the EU and U.S. will accelerate net-zero goals, creating demand for energy-saving equipment and integrated solutions. Overall, by embracing digital and green transformation and adapting to supply chain shifts, Taiwan’s machine tool industry can capture new growth momentum and foster a renewed industrial ecosystem.