The global economic outlook continues to languish amid multiple uncertainties, leaving signals of economic recovery unclear. This has resulted in hesitance within the industry regarding many investment and expansion plans. The Taiwanese machinery equipment sector, in particular, has been heavily affected, with order levels remaining persistently low. President Hsiao Wen-lung, who is both a member of the Taiwan Association of Machinery Industry (TAMI) and the President of Forwell Group, believes that various adverse factors, including the Ukraine-Russia conflict, U.S.-China trade tensions, rising interest rates, inflation, increased raw material prices, tariff barriers, and slow inventory turnover, have yet to show signs of improvement. Consequently, Taiwan's machinery equipment exports have been in decline for 12 consecutive months, presenting substantial operational challenges for the industry.
President Hsiao Wen-lung pointed out that Taiwan is currently facing a complex set of challenges, including the Ukraine-Russia conflict, the U.S.-China trade tensions and upcoming presidential elections. These political factors are significantly impacting Taiwan's investment environment and the future development strategies of businesses. Taiwan finds itself caught in a vicious cycle where political influences are affecting economic growth. Additionally, there are concerns about stagnant inflation, recent natural disasters, and various uncertainties in the Taiwanese market. While the depreciation of the Taiwan Dollar may be advantageous for exports, order levels have not met expectations, leading to a sense of frustration within the market. It is estimated that the growth prospects for machinery industry orders in the second half of this year are not optimistic, with a cautious but hopeful outlook for the first half of 2024.
He further stated that the current period of low capacity utilization for machinery production equipment is an ideal time for companies to reorganize and streamline their production lines. This involves not only comprehensive equipment maintenance and safety inspections but also the opportunity to implement upgrades, improvements, and updates to production equipment effectively. This strategy can enhance productivity, align with future trends towards automation, and reduce carbon emissions. The machinery industry is also actively moving towards energy conservation, carbon reduction, and low-carbon emission targets. Additionally, they are exploring new energy solutions such as energy storage systems and green energy development.
President Hsiao also pointed out that the Taiwanese machinery industry is currently focusing on stable development in terms of intelligence and will gradually move towards Artificial Intelligence (AI) in the future. AI is expected to advance towards more intelligent designs, enabling machines to exhibit greater flexibility and efficiency in line with the requirements of smart manufacturing processes. It is anticipated that AI will significantly change people's lifestyles, work patterns, and traditional habits within the next decade, challenging the existing perceptions of AI. However, President Hsiao emphasized that AI will primarily be applied to rule-based and complex tasks and cannot completely replace human labor. Human expertise will continue to play a dominant role. Consequently, the integration of intelligent AI with Industry 4.0 smart designs in machinery production equipment is poised to become a crucial global trend in the machinery industry.