The COVID-19 pandemic has major impacts on global economic and industrial developments. It causes significant changes in the market demand, supply chain operation, consumer behavior and our daily working style; it also becomes to form new normal in the post pandemic era. Considering the global economic and industrial environment changes in this era, Taiwan's machinery industry needs a diversity strategy to overcome these challenges and keeping our global competitiveness. In this article the impact of COVID-19 pandemic on the export value of Taiwan's machinery industry is explained and the following important issues we need to face in the new normal, such as the ways to accelerate integration of mechanical products and smart technologies. Some methods to enhance the industrial competitiveness from AI technologies, digital products, services, and innovative business models were also being discussed and provided.