Taiwan September exports drop for first time in two years, outlook poor

Published Fri, Oct 7, 2022 · 05:07 PM

TAIWAN’S exports fell in September for the first time in more than two years on weakness in demand in major market China and stagnant consumer spending even as chip demand held up, with the government predicting more turbulence ahead.

Exports fell 5.3 per cent in September from a year earlier to US$37.53 billion, the Ministry of Finance said on Friday (Oct 7), logging a contraction for the first time since June 2020.

That was compared to the 2 per cent rise recorded in August, and well below a forecast for a 1.5 per cent increase in a Reuters poll.

Ministry official Beatrice Tsai said exports were coming off a high base last year, when the Covid-19 pandemic boosted demand for work-from-home gear like tablets, but the “root case” was the effect of high inflation, monetary policy tightening, and stagnant consumer demand from the cooling of China’s economy.

Exports to China, Taiwan’s largest trading partner, fell an annual 13.3 per cent to US$15.17 billion in September, after a 9.9 per cent contraction in August, in a sign of the continued economic problems there.

China will not release its trade data until Oct 14, after the end of the week-long National Day holiday which began on Oct 1.

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However, Taiwan’s overall exports of electronics components in September rose 2.4 per cent to US$16.99 billion, with semiconductor exports up 3.5 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 bolster Taiwanese semiconductor firms’ order books even as demand for some consumer electronics weakens.

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

Earlier on Friday, TSMC reported that September sales leapt an on-year 36.4 per cent, though slipped 4.5 per cent compared to August; while on Thursday, smaller competitor United Microelectronics Corp said sales last month rose 34.5 per cent year-on-year.

The finance ministry warned of trouble ahead from monetary policy tightening in the United States and Europe with manufacturing in various countries slowing significantly, saying there were “deepening doubts” about the outlook.

These problems may “highly impede our export performance in the fourth quarter”, it added.

September exports to the United States were down 2.1 per cent, compared with the 2.3 per cent rise recorded the previous month.

Taiwan’s September imports fell 2.4 per cent to US$32.51 billion, worse than economists’ expectations of a 7 per cent rise and after an expansion of 3.5 per cent in August.

Taiwan could see October exports contract in a range of 3-6 per cent from a year earlier, the finance ministry said. REUTERS

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