Taiwan Feb export orders miss expectations, China, US weigh

By Thomson Reuters Mar 20, 2024 | 4:18 AM

TAIPEI (Reuters) – Taiwan’s export orders fell in February as fewer working days during the Lunar New Year holiday limited productivity, with the outlook clouded by geopolitical uncertainty and high interest rates despite robust demand for AI applications.

Export orders last month fell 10.4% from a year earlier to $37.73 billion, hit by a sharp drop in orders from China and the United States. That missed a 1.3% gain forecast in a Reuters poll. Orders had edged up 1.9% in January.

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

“Demand for new tech applications continued to rise, offsetting part of the overall decreases,” the economy ministry said in a statement.

This year the week-long Lunar New Year, the most important holiday in the Chinese-speaking world, fell in February. In 2023, the Lunar New Year holidays fell entirely in January.

Orders for made-in Taiwan servers, many of which are powering the artificial intelligence (AI) revolution, increased for an eighth month in a row in February, the ministry added.

Looking ahead, the ministry said it expects that export orders in March would rise between 0.9% and 5.2% from a year earlier, and that there was a higher possibility for a return to positive growth in the second quarter.

The first part of the year is traditionally the low season for orders for the island’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, though the government expects faster growth this year.

Taiwan’s orders in February for telecommunication products fell 11.3% on-year, while electronic products slipped 4.3% from the prior year, the ministry said.

Orders from China fell 5.5% versus a 28% gain in the prior month. Orders from the United States were down 5.8% compared with a 2.7% rise in January.

Orders from Europe dropped 35.6%, better than January’s 50% plunge.

From Japan, orders fell 28.0% last month, worsening from a contraction of 21.2% in January.

(Reporting by Emily Chan and Faith Hung; Editing by Himani Sarkar)