Exports fell by a deeper 11.7 percent to US$23.49 billion last month, following an 8.9 percent decline in March, as a lackluster global recovery weakened demand for electronic devices, while cheaper oil prices continued to depress non-technological shipments, the Ministry of Finance said yesterday.
The slump in exports, the deepest in more than five years, indicated a slowdown in growth momentum, leading Australia and New Zealand Banking Group (ANZ) to cut its economic growth forecast for Taiwan from 4.2 percent to 3.79 percent for this year.
“Stripping out holiday disruptions, exports declined for two months in a row, raising concern about deteriorating trade conditions,” Department of Statistics Director Yeh Maan-tzwu (葉滿足) said.
Exports are critical to the nation’s economy, accounting for 77.75 percent of GDP growth in the first quarter, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said last week.
While cheaper oil prices are to blame, a soft global economy and growing competition from trade rivals, especially China, also proved to be a drag, Yeh said.
As in March, the contraction in outbound shipments cut across all product categories — with electronics exports down 3.2 percent and mineral exports falling 48.6 percent, according to the ministry’s report.
The much-anticipated demand for inventory restocking has yet to emerge although international oil prices have shown signs of a recovery, it said.
The DGBAS is bound to cut its export forecast for this year when it updates the growth projection later this month, Yeh said.
Shipments to China decreased 12.2 percent last month from a year earlier, while those to ASEAN and Europe fell 18.9 and 21.6 percent respectively, the report said.
Exports to the US eked out a small 1.2 percent gain, while those to Japan grew 9.3 percent due to a low base, the ministry said.
Meanwhile, imports fell 22.1 percent to US$18.7 billion last month, resulting in a bigger trade surplus of US$47.6 billion, the report said.
For the first four months of the year, exports dropped 6.2 percent to US$93.74 billion, while imports shrank 16.8 percent to US$75.56 billion, lifting the cumulative trade surplus to a record-high US$18.18 billion, the report said.
Exports are unlikely to return to positive territory this month given weak demand for energy-related products and growing competition for DRAM and optical device suppliers, Yeh said.
ANZ expressed disappointment with the latest export data, saying that Taiwan’s growth momentum has started to lose steam, though it outperformed South Korea, Hong Kong and Singapore in GDP growth last quarter.
“We revise down our growth forecast for Taiwan to 3.79 percent for this year, from the previous estimate of 4.2 percent,” as downside risks intensify, ANZ Hong Kong-based economist Raymond Yeung (楊宇霆) said, referring to the slowdown in global technology manufacturing and its unfavorable impact on Taiwan.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to