Taiwan November export orders miss expectations, China drags

Taiwan export orders grew more slowly than expected in November as weaker shipment for smartphones offset strong demand for artificial intelligence technology amid softness from China.

Export orders rose 3.3 per cent last month to $52.27 billion from a year earlier, the economy ministry said.

That lagged the 6.3 per cent gain forecast in a Reuters poll and October’s expansion of 4.9 per cent, but marked the ninth straight month of growth.

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

The ministry expects export order momentum to continue next month, thanks to high demand for advanced semiconductors and AI and partly driven by vendors rushing to stockpile ahead of the Lunar New Year holiday, which falls in late January 2025.

However, the momentum could be offset by factors such as geopolitical tensions and US-China technology disputes, it added.

The ministry said it expects export orders in December to rise between 13 per cent and 17.5 per cent year-on-year.

Taiwan’s orders in November for telecommunications products were down 2.3 per cent year on year, while electronic product orders rose 7.2 per cent in the same period.

Overall orders from China worsened, down 3.4 per cent versus a 0.1 per cent fall the prior month. Orders from the United States jumped 11.7 per cent versus a 12.6 per cent gain in October.

Orders from Europe fell 7.9 per cent in November after gaining 2.7 per cent in October. Orders from Japan were up 17.8% versus a rise of 5.3 per cent the prior month.

Analyst Kevin Wang of Taishin Securities Investment said exporters’ fears of increased tariffs from US President-elect Donald Trump, who takes office Jan. 20, could push strong exports for December.

“Manufacturers are worried about the impending implementation of the tariff policy and will rush to get exports out,” he said.

Taiwan firms such as TSMC, the world’s largest contract chipmaker, are major suppliers to Apple, Nvidia and other tech giants.

In November, exports to the United States rose 10.6 per cent year on year to $8.65 billion, though off October’s rise of 20.5 per cent.

Exports to Taiwan’s largest trading partner, China, jumped 9.5 per cent, a turnaround from the previous month’s fall of 2.1%.

Total exports of electronic components jumped 14.6 per cent in November on the year to $16.73 billion, with semiconductor exports up 15.5 per cent.

Imports rose 19.8 per cent to $33.16 billion in November, better than economists’ forecasts for a gain of 18.15 per cent.

Meanwhile Taiwan’s central bank raised this year’s growth forecast for the tech powerhouse island but flagged risks for next year centred on the trade policies of the incoming Trump administration in the United States.

Taiwan’s economy has benefited from the crucial role homegrown companies like chipmaker TSMC are playing in the AI revolution.

But given its reliance on trade, Taiwan could be vulnerable to across-the-board import tariffs US President-elect Donald Trump has said he will impose. He takes office on Jan. 20.

Taiwan’s central bank said in a statement after its quarterly board meeting, where it kept the benchmark discount rate at 2 per cent as expected, that uncertainty about US trade policy had greatly increased and it was advisable to be “cautious” for possible changes in the global trade landscape.

The bank said it expected Taiwan’s economy to continue the growth momentum next year, with new technologies including the AI boom continuing to boost the island’s exports.

But it said its 2025 GDP outlook has not yet factored in the possible impact of changes in US trade policy.

“That is too big an uncertainty,” governor Yang Chin-long told reporters. “The trade policy of the new US government is an important variable for our economic growth next year.”

The central bank raised its 2024 estimate for economic growth to 4.25 per cent from a forecast of 3.82 per cent in September, and predicted growth of 3.13 per cent in 2025 compared with its prior call of 3.08 per cent.