The exports of Taiwan’s machine tool industry are expected to drop month-by-month this quarter, affected by falling demand in China and Europe, although the demand for Taiwanese robots is to grow this quarter, a Taiwan Automation Intelligence and Robots Association official said yesterday.

“The export value for machine tools plunged 19.4 percent annually to US$284 million last month… We expect the size of the decline to expand further this month due to a lack of demand,” association chairman Eric Chuo told reporters on the sidelines of the opening ceremony of Automation Intelligence and Robots Show at the Taipei World Trade Center Nangang Exhibition Hall.

The order visibility for Taiwan’s machine tools in the final quarter of the year is unclear at the moment, he said.

The sector’s export value dropped 9.1 percent annually to US$164.6 million in the first half of this year, according to data from the Taiwan Machine Tool & Accessory Builders’ Association.

By export destinations, Chuo, who is chairman of the nation’s leading machine tool manufacturer — Hiwin Technologies Corp — said the demand from Europe and China was weaker than expected, and that only US orders remained robust in the past six months.

Chuo said the weakness of the yen against the US dollar also affected Taiwan’s machine tool industry, as a cheaper Japanese currency undercuts orders to Taiwanese companies, while the strength of the New Taiwan dollar also had a negative impact.

The increasing localization of supply chains and softer-than-expected economic growth in China has also affected local machine tools demand, Chuo said.

Taiwanese machine tool makers need to invest in research and development to raise their competitiveness, such as investing in industrial automation or robots to meet the rising demand in the global market, he said.

Hiwin’s consolidated sales reached NT$7.95 billion (US$253.91 million) in the first half of this year, up 21.53 percent from NT$6.55 billion a year earlier, which Chuo attributed to an increase in sales for its automation and robots segment.

Chuo said he expects the export value for Taiwan’s industrial robots to grow month-by-month this quarter.

Machine and robotic control maker Avantech-LNC Technology Co Ltd has a similar outlook, saying that it expects the demand for industrial automation to be stronger in the second half of this year due to labor shortages in China.

“Industrial computers that control industrial robots will benefit from the rising demand for industrial automation,” Avantech-LNC sales representative Allen Fan told the Taipei Times.

The Ministry of Economic Affairs said it estimates the production value of Taiwan’s industrial automation, including industrial robots, is likely to increase 10 percent annually this year to NT$1.2 trillion.