Machine tool exports slumped 21.7 percent year-on-year to US$778.05 million last quarter due to the falling yen and increasing competition from South Korea and China, data released by the Taiwan Association of Machinery Industry yesterday showed.

In the last quarter, machine tool exports to China, the sector’s largest export destination, declined 23.5 percent year-on-year to US$243.99 million, while exports to the US declined 14.4 percent to US$96.76 million and exports to Thailand declined 15.3 percent to US$57.36 million, the data showed.

"Taiwan’s machine tool exports were hurt by the depreciation of the yen because local companies compete with Japanese companies for the same customers,” Johnson Wang of the Taiwan Institute of Economic Research said by telephone yesterday.

Taiwanese companies also face stronger competition from Chinese and South Korean firms, who are upgrading their production techniques, Wang said.

Since last year, many Chinese companies have started acquiring foreign rivals to seek better technology, while South Korean firms are strengthening their customer base in the electronics and automobile sectors, as well as taking advantage of free-trade agreements South Korea signed with the EU in 2011 and with the US last year, Wang said.

Total Taiwanese machinery exports declined 6.6 percent to US$5.99 billion in the first four months of the year from the previous year, led by a 3.8 percent decline in exports to Japan at US$375.96 million. Shipments to China fell 1.4 percent to US$1.65 billion, while those to the US increased 0.2 percent to US$987.63 million, TAMI said.