Taiwan’s export orders unexpectedly expanded in August on strong demand for technology and new consumer electronics product launches like iPhones even as the island’s largest market China faced continued headwinds.
But the government said the outlook was mixed due to a series of uncertainties including high global inflation, increasing geopolitical risks and new COVID-19 strains.
Export orders, a bellwether for global technology demand, grew 2% in August from a year earlier to $54.59 billion, a record high for the month,said the Ministry of Economic Affairs on Tuesday. Analysts had expected a drop of 2%.
August’s rise followed a 1.9% annual contraction in July.
Orders for telecommunications products rose 3.1% in August from a year ago due mostly to cellphone orders, the ministry said. Apple Inc, which many Taiwanese firms make components for, put its latest iPhones on sale this month.
Orders for electronic products jumped 15.4%, driven by semiconductor demand for high-end computing, automobiles and stockpiling for new consumer electronics, the ministry said.
Kevin Wang, an economist at Taishin Securities Investment Advisory Co, said while the “pulling in” of Apple orders was a boon, the rest of 2022 may not be as good, coming off a high base from last year and with increased downside risks in China and Europe in particular.
A trend of working and studying from home that started during the COVID-19 pandemic has fuelled a growth in orders for Taiwanese electronics for more than two years. More recently, a global semiconductor shortage has also filled Taiwanese chipmakers’ order books.
The ministry said it expected this month’s export orders to be between 7% and 9.4% lower than those of September 2021.
It said that even with all the uncertainty, new consumer electronics products from “various international brands”, as well as demand for high-end computing, 5G and automotive electronics, would help export orders remain stable going forward.
Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd are major suppliers to Apple, Qualcomm Inc and other global tech firms.
Taiwan’s August orders from China fell 25.5% from a year earlier, compared with an annual fall of 22.6% in July. Month-on-month, orders from China edged down 0.1%.
China’s economy narrowly escaped contraction last quarter due to widespread COVID-19 lockdowns, and economists say its nascent recovery is in danger of fizzling out amid fresh virus flare-ups and a deep crisis in the property sector.
Taiwan’s orders from the United States rose 7.5% on a year before, a healthier pace compared with the previous month’s 6.9% rise.
Export orders from Europe rose 14.6%, versus an annual contraction of 5.1% in July, while those from Japan rose 2.2%. Reuters