Page 30 - Taiwan Machinery 2022-09 Edition

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INDUSTRY NEWS

Sustainable and circular economy practices can help the machinery industry reach net-zero goals. (Photo courtesy of CENS)

system, yet the recent disruptive events have reintroduced supplier that delayed orders and chip shortage costs have
instability into the supply chain. In addition, accidents yet to reflect capital expenditures.
at the factories, such as factory fires, show a shortage
of skilled labor, regulation enforcement, and process Energy Prices and Inflation Crunch Companies
execution gaps. Low staffing levels could mean deferred Taiwanese manufacturers and suppliers in Western
routine maintenance, and the lack of training would mean countries such as the European Union and the U.S. have
a discrepancy of knowledgeable workers to operate the been feeling the crunch. The price hikes were exacerbated
technology used in factory and warehouse automation, by the Ukraine-Russian war and Russia’s reduction of
both factors that would exacerbate the supply chain issues.
natural gasses to European countries, including the
manufacturing hub of Germany. Other factors, such as
Other countries, more significantly Taiwan’s major
export destination countries, are beginning to show heat waves leading to manufacturing hubs and companies
shutting down factories due to power shortages, offer a
decreased demand in the short term. For instance, Taiwan’s glimpse into potential future industry challenges.
third largest trading partner for machinery exports between
January and June, Japan (USD$1.061 billion/accounting for Manufacturing companies will need to scale back and
6.0% of Taiwan machinery exports), reported a decrease of ration energy consumption, further introducing delays
5.6% for core machinery orders in May alone. May is often and disruptions, creating longer lead times, and longer
considered a benchmark forecast month for demand in the processes of getting products to the consumers. Higher
following six to nine months, and the order performance in energy prices will also cut company profits. With inflation
May was the first of its kind in the past three months.
impacting consumer confidence and spending habits on
the consumer-end side, the ripple effects could travel
Many factors are contributing to the struggling demand,
and among them are the persistent shortage of chips and throughout the global supply chains.
parts and importing energy and materials under inflated However, Taiwanese machinery suppliers can offer
prices. A domestic Taiwanese media reporting on the added-value features to help buyers become more
market situation in Japan quoted a Japanese machinery

Taiwan Machinery 2022 September