Taiwan June export orders slump for 10th month, outlook may improve on AI

TAIWAN’S export orders fell for the tenth consecutive month in June, as weak China demand, inflation, and high interest rates continued to offset surging demand for the island’s artificial intelligence (AI) supply chain.

Taiwan’s export orders, a bellwether for worldwide technology demand, fell 24.9 per cent from a year ago to US$44.18 billion, the Ministry of Economic Affairs said on Thursday (Jul 20).

The rate of contraction worsened from a 17.6 per cent drop in May and a 20.0 per cent predicted fall in a Reuters poll.

The ministry reiterated previous warnings that persistently high inflation and rising interest rates, along with the global repercussions of the war between Russia and Ukraine, could continue to impede economic growth momentum in the months ahead.

“The overall trends haven’t changed much in terms of the international economic situation,” Economy Minister Wang Mei-hua told reporters earlier on Thursday.

“But for Taiwan’s exports in the second half of the year, things will gradually heat up, due to growing demand for the AI supply chain.”

Orders for telecommunications products fell 27.4 per cent and electronic products fell 22.0 per cent from a year earlier, the ministry said.

Taiwanese firms such as Taiwan Semiconductor Manufacturing Co (TSMC), are major suppliers to Apple, Nvidia and other global tech companies.

TSMC on Thursday forecast a 10 per cent drop in 2023 sales after reporting a 23 per cent fall in second-quarter earnings as global economic woes dented demand for chips.

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The ministry said it expected export orders in July to fall by between 17.1 per cent and 20.7 per cent from a year earlier.

Taiwan’s June orders from China were 19.7 per cent lower on year, versus a 20.9 per cent drop in the prior month.

Orders from the US fell 23.6 per cent from a year earlier, versus a 13.5 per cent drop during the same period.

Orders from Europe slumped 44.2 per cent versus May’s 34.9 per cent slide. Orders from Japan dropped 17.0 per cent year-on-year. REUTERS