Taiwan Jan export orders beat expectations on AI demand, but outlook soft

By Thomson Reuters Feb 27, 2024 | 3:10 AM

TAIPEI (Reuters) – Taiwan’s export orders beat expectations in January amid robust demand for artificial intelligence applications, but the outlook remains soft as high interest rates in major Western markets and geopolitical uncertainty weigh on demand.

Export orders last month edged up 1.9% from a year earlier to $48.42 billion, beating a 3.6% decline forecast in a Reuters poll. Orders dropped 16.0% in December from a year earlier.

Orders for goods from the island, home to tech giants such as chip manufacturer TSMC, are a bellwether of global technology demand.

“The 1.9% on-year gain was mainly because of strong demand for new applications of high-performance computing and artificial intelligence,” the economy ministry said in a statement.

It was also due to increased stockpiling before the week-long Lunar New Year break, it added, the most important holiday in the Chinese-speaking world.

However, looking ahead, the ministry said it expects export orders in February to fall between 11% and 15.7% from a year earlier. The first part of the year is traditionally the low season for orders for Taiwan’s high-tech goods.

The ministry cited risks ahead including the impact of high interest rates in the United States and Europe, China-U.S. trade disputes and broader geopolitical uncertainty.

Weak demand for Taiwan’s technology products amid global economic uncertainty saw the export-dependent economy grow at its slowest pace in 14 years in 2023.

Taiwan’s orders in January for telecommunication products slipped 19.3%, while electronic products gained 16.1% from the prior year, the ministry said.

Orders from China jumped 28% compared with a 3.5% drop in the prior month. Orders from the United States were up 2.7% compared with a 21.6% slide in December.

Orders from Europe sank 50%, worse than December’s 39.4% plunge.

From Japan, orders fell 21.2% last month, improving from a contraction of 30.5% in December.

(Reporting by Faith Hung and Jeanny Kao; Editing by Jacqueline Wong)