Industry Focus

Taiwan’s

Fastener Export andTop Historic Events

over Past 2 Decades

Data + Top Events + Grand Perspective
The world market and economy slipped down a bumpy road in the last 5 years. A string of political and economic strikes sufficed toimpact the structure of the global supply chain, ending up smashing multiple economic entities to the ground during 2020 and 2021. Taiwan
stepped out of the depth of the tunnel into light starting from the second half of last year, but the lingering supply chain disruption andconcerns over escalating interest rates remain a huge burden to Taiwan. We have sources from in and outside of Taiwan pointing out that next
year could be worse with more uncertainties—could the Russia-Ukraine war truly end at the time as expected, or could a near-boiling politicaltension in Asia Pacific trigger another supply chain disruption? To that, there are some who predict the critical manufacturing sector willtake the brunt of the impact. However, does that also apply to Taiwanese fastener industry, which is part of the critical manufacturing sector,and does it hold true that Taiwanese fastener industry will take a huge impact next year? This is a big question that raises concern among
Taiwanese fastener companies and leaves them on tenterhooks.
To set the ball rolling, Fastener World went through the past 20 years of data on Taiwan's global fastener export and volume. More
importantly, we are going to combine the data with the big events of the world in chronological order, those critical events that had an
influence on the global economy and suppliers. With a cross check, we may be able to sort out a pattern or trend, and monitor the level ofpotential impact on Taiwan fastener industry in the future.
Let’s first look at Table 1 for the export statistics over the past 20 years, and compare with global big events. In Table 1, the growth rates
of volumes and values for Q1-Q3 2022 are in comparison to Q1-Q3 2021. Taiwan’s global fastener export volumes and values are illustrated inline charts in Figures 1 and 2.
In Figure 1, we found that from a broad perspective, the export value was steadily growing along a 20-degree forward slash
trajectory in the last 20 years. A similar trajectory is observed in Figure 2. This alone suffices to highlight critical characteristics ofTaiwan fastener industry—resilience and stability. Back to Table 1, despite the global economic recession from 2007 to 2005, Taiwan’s

Global Export Value (USD)

Fig. 1. Taiwan’s Fastener Export Value in the Past 20 Years
6,000,000,000
5,000,000,000
4,000,000,000
3,000,000,000
2,000,000,000
1,000,000,0002221Q1-320

20

20

19

20

20

18

17

20

16

20

15

20

14

20

20

13

12

20

11

20

10

20

09

20

2008

07

2006

20052004202003

2020020246

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Table 1. Taiwan's Fastener Export and Global Top Historic Events over the Past 2 Decades
Year
VolumeVolumeGrowthValue
Value Growth

Big Events

Year
VolumeVolumeGrowthValue
Value Growth

Big Events

Year
VolumeVolumeGrowthValue
Value Growth

Big Events(Value in USD, Weight in KG

2002
1,081,053,010

2003
1,148,896,509

2004
1,266,224,387

2005
1,148,305,845

2006
1,208,756,429

2007
1,174,269,915

2008
1,125,513,687▲ 7.53%▲ 6.28%▲ 10.21%▼ 9.31%▲ 5.26%▼ 2.85%▼ 4.15%

1,437,441,040▲ 4.96%

1,682,714,604▲ 17.06%

2,191,895,688▲ 30.26%▼ 27.44%▲ 47.72%▲ 11.72%▼ 5.13%▲ 7.24%▲ 9.53%▼ 2.04%

1,927,175,716▼ 34.78%

3,066,814,297▲ 59.14%3,586,618,369▼ 5.81%

3,679,741,858▲ 2.60%4,048,948,068▲ 10.03%3,880,596,255▼ 4.16%2,316,331,654▲ 5.68%
U.S. Subprime
Iraq war; SARS
mortgageEuros inepidemic;
Indian Ocean
crisis brewing,circulation as fiat
EU eastward
tsunamiprecursor tocurrency
expansion
global financial
crisis
2009
2010
2011
2012
816,653,088
1,206,369,710
1,347,746,764
1,278,585,161

UK quantitativeeasing;European debt
crisisU.S. 2nd
quantitativeeasing; ArabSpring

2016
1,435,750,086

2017
1,498,070,256

3,808,037,696▲ 24.17%
Large USD
depreciation
vs. appreciationof othercurrencies;
2011 Japan
earthquake andceased supply ofJapanese carsand electronics
2018
1,595,705,450▼ 2.40%▲ 4.34%

3,610,883,236▼ 6.95%

4,090,303,303▲ 13.28%

2,438,393,759
2,755,747,624
2,954,669,915▲ 5.27%▲ 13.01%▲ 7.22%
Inflation due
U.S. Subprime
to high oil
mortgage
Financial crisis;
price; Monetarycrisis outbreak;
U.S. and Japan
tightening policy
Economicquantitative easing
in multiple
recessioncountries
2013
2014
2015
1,371,098,506
1,501,697,033
1,470,992,279

Euros zone
Annexation
quantitativeof Crimea byeasing; China
Russia; Negative
stock market crisis
deposit rates
and consequent(-0.1%) adoption
emerging market
in euros zone tocrisis causing
save European
2-digit export dropeconomy
in Asian countriesU.S. 3ndquantitativeeasingJapan
quantitativeand qualitativeeasing2019
1,479,292,223

2020
1,363,249,857

2021
1,610,697,606

Q1-Q3, 2022
1,248,941,656▲ 6.52%▼ 7.30%▼ 7.84%▲ 18.15%▲ 4.37%

4,638,685,129▲ 13.41%

4,316,380,032▼ 6.95%

3,969,114,428▼ 8.05%5,319,398,407
4,744,636,991▲ 34.02%▲ 23.81%
Biden assumed EU's AD tax up toWuhan
office; EU's Import 86.5% on China's
lockdown; COVID
registration
fasteners; China'sBREXIT
defined as a
Trump regime U.S.-China trade
policy on China's zero-COVID policy;
referendum andpandemic byand tax reform in war upping tariff COVID outbreakfasteners andU.S. opening up
negotiation withWHO; BREXIT
effectby 25%
consequent
market; RussiaEU
in effect; Dow
purchase order
Ukraine war;
Jones Index
redirection toEuropean energy
plungeTaiwancrisisfastener export remained on a growth track. Although the growth went down from the double-digit 13% to a single-digit 7%, Taiwan was able
to hold its growth trend. Interestingly, in 2009 a debt crisis broke out in Europe which was one of Taiwan’s top export markets and the exportthat year dropped 34%, but Taiwan fastener industry was highly resilient and made a comeback with a rebound of nearly 60% growth in 2010.
The loss and gain added up to an additional growth of 30% and Taiwan literally regained what was lost from 2009.

22

21
Q1-3

20

20

20

19

20

18

20

20

17

16

20

15

20

14

20

13

20

20

12

11

20

10

20

09

20

08

20

20

07

06

2005

20

04

20

20

20

20

03

1,800,000,000
1,600,000,000
1,400,000,000
1,200,000,000
1,000,000,000800,000,000
600,000,000
400,000,000
200,000,000002

Global Export Volume (KG)

Fig. 2. Taiwan’s Fastener Export Volume in the Past 20 Years

248

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See the Value in Taiwan Fastener Industry
The next crisis that followed was when many Asian countries experienced a double-digit export drop in 2015. The impact on Taiwan’sfastener export value was relatively small with a drop of 4%. In 2018 when U.S. imposed a high tariff on China, Taiwan's fastener export value
made a double-digit growth of 13%. Next came the pandemic and everyone knows and has experienced it inside out. In other words, “resilience”
is the protective shield already existing in Taiwan fastener industry. Taiwanese fastener people ought to clearly recognize their definitivecompetitive edges, which are their unity, division of work, and helping each other. These 3 pillars build up a strong fastener supply chain
in Taiwan. This is the “industry value” that needs to be seen clearly and guarded persistently.
Commercial profits and competition in the industry is temporary. In the face of a cross-nation challenge and disruption of supply
chain that is serious enough to shake up the industry structure, the said industry value is the shared profit and goal for Taiwan fastenerindustry. In every drastic change, Taiwan's fastener and related business owners could always forge collaboration andredeploy capacity as appropriate to weather Taiwan through each crisis, even setting a high record ofexport in 2021. This is invaluable and Taiwanese fastener people should feel proud of it.
There is no need for them to envy the IT industry which is now dubbed
as Taiwan's silicon shield. They already have an invisible
soft power that serves as a protective shield and theyshould already come to sense it.

Look for the Pattern, Peep into the Future
Next, we are going to look into “patterns”. Judging from Table 1, in the last 20
years Taiwan's fastener export fluctuated up and down roughly within an averagemargin of 10% which is relatively stable and not like what is said to be a sharp plunge.
The fluctuation in fact reflects the adjustments of capacity by Taiwanese fastenerindustry in accordance with economic demand. This echoes with the aforementioned 3pillars in Taiwan’s supply chain.
Taiwan fastener industry is an indispensable critical industry, so it is not like smart phones, PCs, semiconductors, automobiles andmachines that are more subject to the changes on the international market. As a suggestion, the fluctuations of fastener exports can beevaluated based on respective countries’ GDP performance.
The past 20 years saw over 100 Taiwanese companies invest and set up plants in China and Southeast Asia. Their purchase makes a
big influence on Taiwan’s fastener production and supply. Issues of population, land, market and tax are among the factors that push many
Taiwanese fastener companies to make investment abroad. The most impactful factor is wire rod cost.
Fortunately, in the 2018 trade war, the U.S. imposed an additional 25% tax on China, and Europe imposed a tax up to 86.5% on China’s
fasteners since the beginning of 2022. Taiwan benefits from this and has achieved explosive overseas sales over the last 2 years, thanks toheaven’s blessing.
Furthermore, from Figures 1 and 2 we observed Taiwan’s fastener export takes around tow years to finish one cycle of fluctuation. This isimportant because we can use it to predict the next time Taiwanese fastener industry warms up. We combined this pattern with our discussion
and the conclusion we had with Taiwan CSC and related Taiwanese fastener companies. The current consensus is that the next big swarm ofpurchase orders is expected to arrive in Q1 or Q2 2023, and the reasons include the end of Russia-Ukraine war and a halt of U.S. interest rate
hike by that time. The pandemic may come to an end as well so it will speed up economic recovery.
In the past global recession, the U.S., Europe and Japan resorted to quantitative easing to save their economy, by smashing down interest
rates and providing financial support to help businesses with their cash flow and operation, thereby spurring investment and revitalizing theeconomy. However, the current global recession is an opposite story. The U.S. continues to raise the interest rate and the Russia-Ukraine War
is causing material price hike that forms an ever greater stress on companies.
It means challenges will not stop coming to Taiwan, but this country has 40 years of proven experience and resilience to pick itself up
and come out of a whirlpool. Taiwan has steadily come out of the pandemic and will stick to their industry value to get through next year’s
challenges.
by Dean Tseng, Fastener World250

Fastener World no.197/2022