Taiwan recorded exports to the US more than doubled in August, thanks to the booming AI industry, giving rise to demand for chips. This jump offset the decline in demand from China which has been subdued.
Taiwan’s export growth for August also surpassed projections as demand for AI products and hardware continued to strengthen. Audiovisuals, information, and computer products, which make up a category that covers finished smartphones, played a critical role in the export growth.
Exports from Taiwan exceeded forecasts
According to finance ministry, as cited by Reuters, total exports jumped by 16.8% in August to $43.64 billion year-on-year. The growth exceeded an increase of 7.35% which was projected in a Reuters poll as well as July’s gain of 3.1%, which represented a 10th successive monthly increase.
“August’s export value hit a record as business for AI and high-performance computing continued to be strong, as well as international brands stocking up on new products,” the ministry said in a statement.
The ministry is also upbeat about maintaining the growth trajectory during the second half of the year with a “gradual upward slope” witnessed as exports enter their peak season supported by the end-of-year holiday shopping season in Western markets such as the US and Europe.
The ministry has also projected September exports to gain between 5% and 9% on the year. During the month of August, exports to the US surged by 78.5%, which was also a record high compared to a growth of 70.3% reported in July.
Exports to other markets and biggest trading partner – China, overturned the 13% decline recorded in July to a 1% growth in August.
According to Reuters, total shipments of electronic components rose by 1% during the month under review to $15.15 billion although semi-conductor exports went down by 0.5%.
Taiwan firms supply big companies
According to a Reuters report, Taiwan’s companies such as TSMC are the major suppliers to Apple, Nvidia, and other tech giants. Demand for AI products and has been growing as the tech continues to gain traction on a global scale due to its transformative abilities.
In terms of export destination, North America remained the fastest-growing export market for Taiwan’s products recording a 75.3% year-on-year growth in August, while Central America recorded 39.3% growth and the Middle East at 11.8%.
According to ING, exports to Asia recovered to register a growth of 3.3% year-on-year from a negative position of 8.3% in July supported by recovery of exports in mainland China and Hong Kong.
By product, most of Taiwan’s exports were in the machinery and electrical equipment which constituted about two-thirds of the total exports. The category grew 22% compared to a growth rate of 6.6% in July year-on-year as it outpaced year-to-date growth of 18.6%.
As exports recorded exponential growth during August, imports slowed down during the same period. According to ING, imports growth slowed to 11.8% year-on-year compared to a growth of 16%.
The negative growth in imports was mainly seen in different categories including mineral products at -6.9%, vehicles at -5%, and textiles at -4.2% while animal and vegetable products fell 11.7% and 16.1% respectively. The declines were attributed to a general fall in the price for these categories.
However, other products registered resilience when it comes to imports into Taiwan. The electrical equipment and machinery remained resilient to be the biggest subcategory to register a growth of 20.1% driven by imports of electronics parts.
This resulted in a trade surplus, which more than doubled to $11.5 billion compared to $4.8 billion in July and also beating projections of $11.2 billion. The more-than-anticipated performance is expected to support the country’s third-quarter GDP.
