Export orders plunged a deeper-than-expected 12.3 percent annually last month on weak demand for iPhones, while the whole-year figure for last year fell from a year earlier for the first time in six years, Ministry of Economic Affairs statistics showed yesterday.
Export orders sank for the ninth month, reaching US$38.81 billion last month from US$44.23 billion a year earlier, falling short of the ministry’s estimated range of US$39 billion to US$40 billion. Total export orders last year shrank 4.4 percent from a record of US$472.81 billion in 2014 to US$451.81 billion.
The contraction in last month’s export orders was more severe than the market’s expectation of a 7 percent annual decline, Australia and New Zealand Banking Group (ANZ) said in a report released yesterday.
The disappointing data indicate that the central bank needs to “act aggressively and further cut the policy rate in the first quarter and second quarter” of this year, ANZ economist Louis Lam (林慕爾) said in the report.
Lam said the central bank is likely to cut rediscount rates by 0.125 percent points in March and again in June — bringing the the policy rate down to 1.375 percent by the end of the first half — given poor growth outlook of the economy and China’s economic slowdown.
The ministry said the worst is not over yet.
It said it expects the decline to extend into the current quarter due to the seasonal slowdown of the electronics sector and fewer working days during the Lunar New Year holiday, which begins on Feb. 7.
“Seasonal weakness will negatively affect orders for the three major pillars of the nation’s exports in the first quarter,” Department of Statistics Director-General Lin Lee-jen (林麗貞) told a media briefing.
Export orders this month are expected to decline by a double-digit percentage to between US$33 billion and US$35 billion, Lin said.
“There is a good chance the nation’s export orders will return to positive territory in the second quarter, as global mobile-device makers are likely to place new orders in preparation for new product launches in the second half,” Lin said.
The gradual recovery might pave the way for Taiwan to report flat or slightly increased export orders for the full year this year on an annual basis, Lin said.
The semiconductor sector is likely to outperform the rest of the market with moderate growth this year, while LCD panel makers would continue to struggle, she said.
“Demand from the US looks good this year, while orders in Europe are likely to return to positive territory,” Lin said.
Lin attributed slumping demand for smartphones last month, especially in the US, to last month’s weak results.
Export orders from the US fell for the first time in about two years to US$11.02 billion last month, down 8.1 percent from a year earlier as demand for chips and mobile devices tumbled, ministry statistics showed.
Export orders in China, including Hong Kong, have been in a downward spiral for 11 months, falling to US$9.14 billion last month, down 8.8 percent annually, with demand for LCD panels suffering the brunt due to constant oversupply.
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
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
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],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts