In1949 Mainland China was taken over by communist regime. Following the KMT government’s moving to the Taiwan Island, most wool textile industry successively relocated their wool spinning and weaving equipments to the island. These mills, including Zhong Ben Weaving Factory, Taiwan Furs Manufacturer, Fu Hua Wool Spinning and Dying Factory, Taiwan GTM Weaving Company, Mei-Feng Wool Spinning and Dying Company and so on, sought proper operation location in order to manufacture various wool textile products to meet the demand of domestic market. Till 1952, Taiwan wool textile industry had 6 mills totally. The above mentioned five companies together with Wang Tian Wool Spinning Company were holding 8,064 worsted spinning spindles, 152 sets woolen loom. Hence, foundation of the wool textile industry was established.

In 1953 the domestic market of wool textile products was very prosperous. Zhong Hua Wool Spinning and Weaving Factory and Kuen Qing Weaving Factory were set up in succession. Since 1954, under the economic plan implemented by the governments, national income was increasing year by year, the level of living also enhancing, the demand of the wool textile products became eager, and domestic market of the wool textile products gradually grew to be prosperous; meanwhile, the export market was also steadily developing, exporting to the South Korean and the Middle East in the early stage, and subsequently developing the markets of Hong Kong, the European, and the U.S. The wool textile industry grew rapidly thereafter.

During 1957 to 1966, the wool textile mills were burgeoning. Xin Hua Wool Spinning and Weaving Factory, Leader Textile and Fiber Factory and other mills successively set up, introducing newest woolen looms. The equipment increased sharply, holding worsted spinning over 42,000 spindles, woolen spinning 10,070 spindles, and woolen loom 640 sets. Because of the increase of textile mills, the demand of raw material enlarged accordingly. Therefore, Li Hua Wool Company was established by the joint venture to produce wool tops and carbonized wool. Subsequently, Zhong He Wool Company and Feng Tar Wool Industry Company had also participated in the production. Since then Taiwan wool textile industry had accomplished the vertical integration production system with raw material manufacturing, spinning, weaving, dyeing and finishing processing.

After 1966, synthetic fiber industry was prosperous day after day. In the same time, the wool textile products market was flooded with the smuggled goods, which caused the sale in domestic market blocked; hence, business operation became extremely difficult. In order to go through the crisis, and to be in accordance with government’s policy of promoting export, the wool textile industry adopted the measure of reducing 25% of production in 1967, fixed the percentage of domestic and export sales, as well as increased export sales portion year by year with the view of reaching the balance between production and marketing. The result was outstanding which made the export amount increased to more than 30 millions U.S. dollars in 1973 from 7 millions U.S. dollars in 1966.

Due to the excellent effect of balance scheme between production and marketing in 1974, new factories were setting up one by one. The old factories were keeping on renewing, expanding the equipment, with a result of expanding of wool textile mills to 40 in 1976, the worsted spinning over 60,000 spindles, woolen spinning over 40,000 spindles, and woolen loom 800 sets, as well as 3 wool top mills holding more than 90 Gillbox Comber and 2 set carbonized machinery. The amount of export sales was increasing to over 60 millions U.S. dollars. By that time Taiwan wool textile industry presented a prosperous, new outlooks.

After 1976, foundation of the wool textile industry became stable. The export market was substantially developing; the national income was increasing; the living standard was higher than before; the industry was continuing development within ten more years, turning the status of Taiwan wool textile industry from the "impoverishment" of 40 years ago to the summit.

Since 1987, Taiwan wool textile industry suffered unprecedented drastic transform. The increase of world wool demand and depreciation of Australian dollar caused the wool price getting higher. Moreover, the N.T. dollar appreciated greatly against U.S. dollar also made the cost of imported wool raise to a high level. Simultaneously, the insufficiency of domestic manpower, the surge of wages, the labor becoming conscious of their rights, and the aspiration of working was low down, therefore, business operation of the wool textile industry became extremely difficult. Moreover, in the export market the industry had to cope with the price competition from South Korea and China. Domestic market was influenced by the policy of open market and tariff reduction. Competition of the market was extremely fierce which placed the wool textile industry in a predicament never had before. Subsequently, globe fashion tended to the graceful sheer style. Heavy-weighted fabrics went out of fashion. Wool from Australia, the largest wool output country, was unsalable; hence, Australian government intended to vigorously promote their industry, and massively killed the sheep on schedule to keep down the wool output, but the stock of wool output still largely increased. Australian government finally made the announcement to abolish the control of wool base price and to adopt the policy of free competition on February 11, 1991. This new measure caused the wool price greatly collapsed and decreased 40%, and triggered numerous disputes among the transaction. Among these 4-5 years, Taiwan wool textile industry suffered the severe impact and faced with serious crisis, especially the woolen and spinning industries were hurt harshly. In recent years some wool textile entrepreneurs have been seeking to move their factories to low cost region or the Mainland China under the extreme difficulty, which is really a concealed worry of the wool textile industry.

Going through the adjustment period in recent years, wool textile industry has changed their products to high quality fine yarn in order to coordinate with the fashion trend. Moreover, after the IWSA vigorously promotes the cool wool series products, the wool price is gradually rising again to the status of steady. The superior characteristic of wool fibers is the most favorite of the human being, which couldn’t be substituted by other fibers. It is deeply believed after passing the dark and gloomy period the prospect of Taiwan wool textile industry is still brilliant and glorious.