Taiwan’s export orders grew at their fastest pace in six-and-a-half years in February on strong global demand for electronics that’s bolstering makers of memory chips, flat panels and smartphones.
The stronger-than-expected performance and a seventh straight month of gains in orders for the trade-reliant economy reinforce expectations Taiwan’s central bank will leave its key policy rate unchanged when it meets on Thursday.
Other Asian exporters such as China and South Korea have also seen marked improvement in shipments so far this year as global demand improves, though the size of Taiwan’s jump may be exaggerated by comparisons with weak trade figures through much of last year, analysts said.
“For tech, the outlook for the first half should be fine, but the second half has higher uncertainty,” said Claire Huang, an economist with Societe Generale in Hong Kong, adding that prospects for China’s economy later this year are not clear.
Annual headline export order growth “could go down because the February surge is a result of the base effect,” she said.
Orders surged 22% in February from a year earlier, its strongest pace since August 2010, when they expanded 23.3%, and were well above growth of 15.8% forecast in a Reuters poll.
Export orders are a leading indicator of actual shipments 2-3 months ahead and a gauge of demand for Asia’s high-tech gadgets. The value of export orders in March is expected to rise to around $37.5bn-$38.5bn, from February’s $33.75bn, economics ministry official LJ Lin told reporters yesterday.
January orders totalled $36bn. The jump comes off a weak base as export orders were stuck in a 16-month stretch of contraction that didn’t end until August last year.
Still, January and February performance as a whole was still strong – up 12.7% from a year earlier.
Analysts prefer to look at combined January and February data due to distortions from the timing of the long Lunar New Year holiday.
This year, it began in late January while last year’s start was in February.
Many Taiwan-owned factories are based in China and would have been closed for days.
Orders from Taiwan’s major markets all accelerated at a double-digit pace.
Orders from the United States, where Apple Inc is a major customer for many Taiwanese technology component makers, jumped 21.1% in February from a year earlier, and rose 11.9% for the first two months of the year.
From China, the island’s biggest trading partner, orders soared 40.5% last month and they were up 20.5% in January-February.
Orders for technology parts, including those used in electronic, information and telecommunications goods, also rose by double-digits.
Hopes are building that the 10th anniversary edition of the iPhone, expected to be launched later this year, will generate orders for components from Taiwanese tech companies who make much of the guts of Apple’s popular smartphone.
More memory capacity, dual-lenses for its cameras and bigger-sized panels will be needed for the new phone, according to a recent research report by the Taiwan Institute of Economic Research, a think-tank.
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