Taiwan’s exports rise on back of sustained demand for technology

Taiwan’s exports rose for a 23rd straight month in May on the back of sustained demand for technology, despite China’s tough COVID-19 lockdowns, and the government said the outlook was good even as the Ukraine war and inflation cast shadows on demand.

Exports rose 12.5 per cent in May from a year earlier to $42.08 billion, the Ministry of Finance said on Wednesday, the second highest monthly figure on record.

That was slower than the 18.8 per cent leap recorded in April, but largely in line with the forecast from a Reuters survey of analysts for a 13 per cent rise for the month.

The ministry attributed the May growth to strong technology demand, even as China’s strict COVID-19 lockdowns “disrupted some export momentum”.

May exports to China, Taiwan’s largest trading partner, grew an annual 0.8 per cent to $15.81 billion, slowing sharply from a 10.6 per cent on-year rise in April, as many cities remained under lockdown. China has begun to relax virus restrictions in some places in recent weeks, though analysts say its zero tolerance COVID policy is a major risk factor that could extend into next year.

Ministry official Beatrice Tsai told reporters that demand from China had not vanished but had just been “postponed”, and now China that is opening up again it will support June exports.

May exports to Southeast Asia rose an on-year 24 per cent to a historic high, likely due to production being shifted by companies from China due to the lockdowns, Tsai added.

Overall exports of electronics components rose 25.9 per cent in May to $16.71 billion, with semiconductor exports jumping 28.3 per cent from a year earlier.

Many companies expect global chip shortages to last at least for the rest of the year, which will continue to fill Taiwanese semiconductor firms’ order books.

Firms such as TSMC, the world’s largest contract chipmaker, are major suppliers to Apple Inc and other global tech giants, as well as providers of chips for auto companies and lower-end consumer electronics.

The finance ministry warned of uncertainty over the war in Ukraine and inflationary pressures, but said the outlook continued to be bright for semiconductors for applications including in the auto sector.

Exports to the United States were up 15.5 per cent, slower than a 26.6 per cent jump recorded the previous month.

China will release its May trade data on Thursday.

Taiwan’s May imports rose 26.7 per cent to $39.68 billion, a historic high and better than economists’ expectations of a 19.75 per cent rise, after an increase of 26.7 per cent in April.

Taiwan could see June exports increase in the range of 11 per cent to 15 per cent from a year earlier, the finance ministry said. CNA