Export orders fell at a higher-than-expected rate of 8.3 percent year-on-year last month on sluggish demand for consumer electronics products primarily in China, which does not bode well for the nation’s economic growth this quarter, statistics released by the Ministry of Economic Affairs yesterday showed.
The outlook for this month is bleak as the decline in export orders is expected to accelerate to a double-digit percentage on an annual basis due to a higher base in September last year and uncertainty over demand for Apple Inc’s new iPhone 6S, the ministry said.
“Strong demand for the global brand’s new phone helped lift export orders by US$5 billion in September last year, but it is hard to see such a strong boost in light of the small specification upgrade,” Department of Statistics Director-General Lin Lee-jen (林麗貞) said.
Photo: Lin Sheng-fa, Reuters
Orders from Apple could add US$3 billion or US$4 billion to the nation’s export orders this month, which would be about US$39.03 billion, a 9.88 percent reduction from the US$43.31 billion posted the previous year, the ministry said.
The contraction in export orders last month was the biggest since the global financial crisis in 2008 and 2009, according to the ministry’s data.
Last month, export orders fell for a fifth consecutive month to US$35.03 billion, compared with US$38.21 billion the previous year.
The decline exceeded the “market’s expectation of a 4.7 percent decline,” Australia and New Zealand Banking Group (ANZ) said in a research note issued yesterday.
The “data points to a possible contraction of [Taiwan’s] GDP in the third quarter,” the bank said.
Due to tumbling exports and export orders, earlier this month ANZ cut its GDP growth forecast to minus-0.27 percent year-on-year this quarter from the 1.65 percent growth it previously forecast.
“The weak export orders data in August are consistent with our new forecast,” ANZ said.
The ministry blamed the struggling global economy, China in particularly, for “disappointing” export orders last month.
The weak data increases the odds that Taiwan will report a negative growth rate this year for the first time since 2009, Lin said.
“We originally thought the contraction in August would be at a similar pace [5 percent year-on-year] with July,” Lin said. “The weak global economy continues to weigh on consumers’ consumption of consumer electronics and on corporate investment.”
Slow demand for mobile devices in China and growing competition from Chinese component suppliers cut demand for Taiwanese components such as handset chips, Lin said.
Export orders from China including Hong Kong plunged 14.8 percent year-on-year to US$8.66 billion last month, marking the fastest annual decline in history, the ministry said.
The US is the only bright spot, with export orders up 0.6 percent year-on-year to US$9.48 billion last month, the ministry’s data showed.
The decline in orders in all the nation’s major export segments was extensive last month, except the information and communications sector.
Orders for information and communications products rose 4.7 percent year-on-year last month, while orders for LCD panels plunged by 22.6 percent year-on-year to US$2.17 billion, the steepest decline since May 2009.
Lin said panel prices have been falling because of weak demand and a supply surplus after Chinese makers ramped up production.
Demand for LCD panels this month looks weak, Lin said, citing a monthly survey conducted by the ministry.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”