Taiwan’s Export Orders Surge 19.5% in August, Setting Records

Taiwan’s export orders surged by an impressive 19.5 percent year-on-year in August 2023, reaching a record US$60.02 billion. This marks the seventh consecutive month of double-digit growth, according to data released by the Ministry of Economic Affairs. While this figure reflects a slight decrease of 0.7 percent from July, it exceeded the ministry’s own estimate, which ranged from US$55.5 billion to US$57.5 billion, showcasing robust demand in key sectors.

The strong performance was largely attributed to heightened demand for emerging technologies, particularly in the fields of semiconductors and high-performance computing. Huang Wei-jie, Director-General of the Department of Statistics, indicated that this trend is expected to continue into the coming months, buoyed by new consumer electronics launches and increased consumer demand.

Growth Trends and Projections

For the first eight months of 2023, Taiwan’s export orders totaled US$454.15 billion, reflecting a growth of 21.1 percent compared to the same period last year. Looking ahead, the ministry forecasts that export orders for September may rise by 6.63 to 9.96 percent, estimating figures between US$64 billion and US$66 billion. On an annual basis, growth for September is projected between 19 to 22.7 percent.

In the third quarter of 2023, the ministry anticipates export orders could range from US$184.5 billion to US$186.5 billion, marking an increase of 19.8 to 21.1 percent from the same period last year. This upward momentum is expected to persist through the final four months of the year, driven by demand for advanced semiconductors and servers, particularly in light of the ongoing boom in artificial intelligence technologies.

Sector-Specific Insights

The latest data reveals that export orders for electronic components experienced a remarkable increase of 39.5 percent year-on-year, largely fueled by the demands of AI and high-performance computing. This surge has positively impacted wafer production and chip packaging, vital components of the semiconductor supply chain. Additionally, orders for information and communications technology products rose by 20.6 percent, benefiting from enhanced demand for servers and Internet communication technologies.

The launch of new smartphones in major markets, including the United States, South Korea, and China, further contributed to the growth across these sectors. In contrast, export orders for machinery products saw a modest increase of 3 percent, reflecting strong demand for automation equipment in semiconductor production, despite a decline in machine tool orders.

However, challenges persist in traditional industries. Export orders for plastic and rubber products fell by 15.3 percent, while orders for base metals dropped by 9.3 percent, and chemical products decreased by 9.5 percent. Manufacturers of base metal products have reported declining orders, attributed to tariffs imposed by the United States. Producers in the plastic, rubber, and chemical sectors continue to grapple with low prices and oversupply from China.

The ministry noted that if China enforces its policy requiring domestic steel producers to cut supply, it could potentially benefit Taiwanese manufacturers of base metal products. As Taiwan navigates these complex dynamics, the outlook for export orders remains contingent on year-end seasonal demand and the implications of ongoing trade discussions, particularly regarding tariffs on technology products as per the US Trade Expansion Act of 1962.

Overall, Taiwan’s export landscape displays resilience and growth potential, driven by technological advancements and shifting global demands. The coming months will be critical in determining whether this upward trajectory can be sustained despite the challenges on the horizon.