Text by Guo Yi

Last Friday (January 16), the Taiwan stock market was bustling due to the favorable effects of the U.S. Section 232 provisions, with the machine tool and machinery sectors experiencing a comprehensive rebound. Companies like Hsieh Yi Machinery, En Da, and Fu Yu hit the daily limit up, while Dong Tai, Hiwin, and Zhi De all closed in the green. This wave of market activity not only reflects the positive effects of tariff relaxation on exports but also highlights these companies' proactive entry into the robotics and automation market, as traditional industries ride the high-tech wave, ushering in industrial upgrades and new investment opportunities.

On last Friday (January 16), the machine tool and machinery sectors in the Taiwan stock market surged, as if injected with a shot of adrenaline, instantly energizing the market. Hsieh Yi Machinery, En Da, and Fu Yu locked in the daily limit up, while Dong Tai, Hiwin, Zhi De, Da Yin Wei, and Gao Feng all closed in the green, with the key being that Taiwan is the "first country in the world to obtain the benefits of the U.S. Section 232 provisions."

Section 232 Benefits! Machine Tool and Machinery Industries Return to a Fair Starting Point

The Executive Yuan pointed out that Taiwan and the U.S. have achieved multiple results in the Section 232 negotiations, including a reduction of tariffs for Taiwan to 15%, no cumulative most-favored-nation treatment, and the acquisition of the most favorable treatment for semiconductors and their derivatives, further expanding supply chain investment cooperation and deepening the Taiwan-U.S. AI strategic partnership. In other words, the starting point that was previously disadvantaged compared to Japan, South Korea, and the European Union has now been leveled, making the traditional machine tool and hand tool industries the biggest beneficiaries.

Looking back to 2025, when the U.S. announced tariffs of up to 20% on Taiwanese products, the mood in the machine tool and machinery industry felt like a roller coaster. At that time, the Taiwan Machine Tool Manufacturers' Association and industry players openly expressed their anxiety, stating that the cost of exporting to the U.S. was about 10% higher than that of Japan and South Korea. If implemented, it would severely weaken the competitiveness of Taiwanese products, with industry players even describing it as "how to survive?" Adjustments in production lines, delayed orders, and uncertainties in exports all plunged the entire industry into a vortex of pressure.

Now the situation has reversed, with the machine tool and machinery sectors rebounding, and the machine tool association has breathed a sigh of relief. The association stated that the reduction in U.S. tariffs not only allows Taiwanese machinery products to compete on a fair starting point with Japanese and South Korean competitors.

Exports of machine tools had previously struggled due to tariffs and global supply chain shocks, with the total export value in 2025 being only $2 billion, a new low since the 2009 financial crisis, and exports to the U.S. declining by 6.8% year-on-year. The unfavorable conditions have now disappeared, including the most favorable treatment for tariffs on steel, aluminum derivatives, and other Section 232 products, which will greatly assist export growth.

Additionally, the association also reminded that although tariff pressures have disappeared, the New Taiwan Dollar remains stronger than the Japanese Yen and South Korean Won, and exchange rate fluctuations still need to be monitored to maintain global competitiveness.

Robotics and Automation as Stock Price Accelerators, Traditional Machine Tools Welcome a New Era

Looking closely at the stocks that have surged in price, it is not just a revival of "old machine tools." A common point among them is that most have entered the robotics or high-precision automation equipment markets.

For example, Hiwin, Da Yin Wei, and Zhi De provide precision transmission and control components, which are important supply chains for industrial automation and robotic control systems; Dong Tai possesses smart manufacturing and system integration capabilities, allowing for the combination of robotic arms to execute automated production, while companies like Hsieh Yi Machinery support precision manufacturing and automation applications with high-performance servo punch presses and other equipment. All of this indicates that the machine tool sector is no longer just traditional machinery but plays a key role in automation and high-end manufacturing scenarios Even though YAN TAT and FUYU's main products still lean towards traditional machine tools, they are actively introducing automated loading and unloading systems and robotic arms to make production lines more efficient and intelligent.

This means that the transformation of the traditional machine tool industry has been successful, deeply participating in the key supply chain of future manufacturing.

The benefits of the U.S.-Taiwan Section 232 provisions are not only short-term advantages for businesses but also long-term strategic accelerators. The policy reduces uncertainties in exporting to the United States, encouraging companies to increase investments in automation, robotics, and high-tech supply chains, while also preserving Taiwan's voice in the global manufacturing chain.

Market investors see this trend and naturally flock to related sectors, causing stock prices to rise in tandem. Companies can leverage policy dividends and technological transformations, making it possible for the traditional machine tool industry not only to return to its former glory but also to seize opportunities in robotics and explore new markets with high added value.

The policy dividends brought by the Section 232 provisions redefine Taiwan's machine tool and machinery industry position in the global supply chain, allowing investors to see the potential for industry upgrades. When traditional industries can deeply integrate with future technologies, with policy support and market demand aligning, the revival of the machine tool and machinery sectors may create a new industrial landscape.

The benefits of the U.S.-Taiwan Section 232 provisions are like a timely rain, injecting vitality into the machine tool and machinery industries. By eliminating export pressures through policy advantages, the layout of robotics and automation provides new growth momentum, allowing traditional industries to ride the wave of high technology and regain their footing in the global manufacturing supply chain