Telecommunications products’ orders in May grew 2.7% in Taiwan

Taiwan’s export orders, a bellwether for global technology demand, logged a strong annual rise in May, recovering from COVID-19 lockdowns in China and global supply chain disruptions, but the government warned of global economic uncertainty ahead.

Export orders last month were up 6% from a year earlier at $55.43 billion, a record high for the month, the Ministry of Economic Affairs said on Monday. Analysts had expected 0.3% growth.

The rise followed a 5.5% annual drop seen in April’s figures, the first fall since February 2020, when the pandemic had just begun sweeping the world.

Orders for telecommunications products in May grew 2.7% on a year before, with some factories still being impacted by pandemic measures in China. Laptop orders were down, for example, the ministry said.

Orders for electronic products jumped 17.4%, driven by semiconductor demand for high-end computing, autos and other appliances, it said.

The trend towards working and studying from home has fueled growth in orders for Taiwanese electronics in the past two years or so, more recently reinforced by a global semiconductor shortage that has filled Taiwanese chip makers’ order books.

The ministry said it expected June export orders to be between 3.3% and 6.1% higher than a year before.

May orders from China were down 13.4% from a year earlier, compared with a fall of 16.9% seen in April, while orders from the United States rose 10.5%, compared with the previous 0.2% fall.

Export orders from Europe grew 9.5%, compared with an annual contraction of 17% in April, while those from Japan fell 7.8%.

The ministry said global tech demand should keep driving export order momentum, but it warned of the war in Ukraine driving up inflation and of challenges presented by persistent supply-chain bottlenecks.

“Uncertainty in the global economic outlook has increased, which may suppress the growth momentum of orders,” it added.

Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd are major suppliers to Apple Inc, Qualcomm Inc and other global tech firms. Financial Post