Taiwan’s June export orders disappoint on weak demand from China

Taiwan’s export orders in June rose less than expected by 3.1 per cent to $45.56 billion. The weak demand from China and for laptops and mobile phones offset the strength in chip exports driven by AI applications.

Export orders from Taiwan, a global technology hub and home to chipmaking giant TSMC, serve as a leading indicator of worldwide tech demand.

Ministry of Economic Affairs reported a 3.6 per cent rise in telecommunications product orders and a 6.3 per cent hike in electronic product orders, driven by AI and high-performance computing applications, these gains were offset by other factors.

Orders from China, Taiwan’s largest trading partner, grew a meager 3.5 per cent, a significant drop from the previous month’s 10.1 per cent jump. Orders from the United States rose slightly to 3.7 per cent, compared to a 3.1 per cent gain in May.

This slowdown coincides with China’s weaker-than-expected economic performance in the second quarter of 2024, attributed to a prolonged slump in the property market and rising job insecurity.

The ministry also cited weak demand for laptops and mobile phones as contributing to the overall decline. Despite “lively” demand for chips and computer servers due to AI advancements, other concerns cloud the outlook.

The ministry warned that high interest rates will continue to impact global economic growth, while risks associated with US-China trade tensions and geopolitical issues remain, potentially hindering the momentum of global trade.

Looking ahead, the ministry projected July export orders to fall within a range of a 2.6 per cent contraction to a 1.6 per cent expansion year-on-year.

Orders from Europe showed improvement, growing by 6.3 per cent in June compared to flat growth in May. Meanwhile, orders from Japan declined 9.2 per cent, following a 15.1 per cent decrease in May.

Attribution: Reuters