Taiwan machine tool industry sees domestic order recovery

台灣工具機產業內銷訂單回溫

TAIPEI (Taiwan News) — Taiwan’s machine tool industry is recovering in domestic orders, driven by demand from the semiconductor and AI sectors, with manufacturers reporting order visibility extending into 2027, CTEE reported.

Taiwan Machine Tool & Accessory Builders’ Association Chair Chen Shen-teng (陳紳騰) said Tuesday that market conditions vary across products and sectors. While machine tool exports fell 1.9% year-on-year in the first three quarters, key component exports rose 13.1%.

Domestic sales have traditionally accounted for about 20% of orders but have risen to around 30% this year. The share has reached 30-40% at some companies and as high as 50% at others, driven by semiconductor and AI-related investment.

Long lead times for key components are delaying shipments, despite stronger demand across several industries. Manufacturers have reported orders from customers in the semiconductor, AI cooling, aerospace, defense, and energy sectors, with some order visibility extending into 2027.

Fair Friend Group has order visibility through the first quarter of 2027, with domestic orders mainly coming from the semiconductor and AI sectors. Its energy-sector customers are primarily involved in the US shale oil industry.

Quaser Machine Tools Inc. has an order backlog worth at least NT$2 billion, mainly from the aerospace and defense industries. Orders extend beyond the second quarter of 2027.

The company has also secured an order from a customer in the solid oxide fuel cell (SOFC) industry. Certification is expected to be completed in November, and the first set of equipment is scheduled to ship from the company’s UK plant by the end of the year.

At Shieh Yih Machinery Industry Co., orders related to AI server manufacturing have surpassed those for high-end household appliances this year. The company expects its order visibility to extend through the end of 2027.

Taiwan Takisawa Technology Co. has received orders mainly from manufacturers of AI server cooling systems, hydraulic pipe fittings, and drone components. Its order visibility extends through the second quarter of 2027.

Machine tools are used to process metal and other materials into precision parts through operations such as cutting, grinding, and drilling, making them essential to manufacturing across industries. As demand for AI servers and robots grows, manufacturers are investing in the equipment needed to produce their components, according to Gugu Fund and UDN Money.