TAIPEI (Reuters) – Taiwan’s export orders unexpectedly fell in July on weakening demand for technology and continued economic troubles in its largest market China, and the government said the outlook for tech demand was mixed though not totally negative.
Export orders, a bellwether for global technology demand, last month fell 1.9% from a year earlier to $54.26 billion, the Ministry of Economic Affairs said on Monday. Analysts had expected 3.6% growth.
July’s drop followed a 9.5% annual expansion in June. April logged the first fall since February 2020, when the pandemic had just begun sweeping the world.
Orders for telecommunications products in July slipped 0.8% on a year before on weaker end-consumer demand, but also off a high base from last year, the ministry said.
However, orders for electronic products jumped 8.8%, driven by semiconductor demand for high-end computing, automobiles and other appliances, it said.
The trend towards working and studying from home has fuelled growth in orders for Taiwanese electronics for more than two years, more recently reinforced by a global semiconductor shortage that has filled Taiwanese chipmakers’ order books.
The ministry said it expected August export orders to be between 0.9% and 3.7% lower than those of August 2021.
Looking ahead, it said that new consumer products released in the second half of the year and stockbuilding of these goods – typically ahead of the year-end holiday season in Western countries – could help support export order momentum.
The ministry added that global inflation remains high, end-consumer demand continues to be weak, there are increased geopolitical risks and the emergence of new COVID-19 strains, all of which are uncertainties pressuring export order growth.
Woods Chen, head of macroeconomics at Yuanta Securities Investment Consulting in Taipei, said export orders would likely register more falls as the year progressed.
“What we don’t know though is just how weak it will get,” he added.
Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd are major suppliers to Apple Inc, Qualcomm Inc and other global tech firms.
Taiwan’s July orders from China plummeted 22.6% from a year earlier, compared with an annual fall of 14.5% in June. Month-on-month, orders from China fell 9.7%.
Orders from the United States rose 6.9% on a year before, a weaker pace compared with the previous 13.3% rise.
Export orders from Europe fell 5.1%, versus an annual expansion of 18.8% in June, while those from Japan rose just 0.1%.
(Reporting by Emily Chan and Ben Blanchard; Editing by Jacqueline Wong)
