Taiwan’s export orders plummeted in May for a ninth consecutive month as a global dropoff in demand for semiconductors showed little sign of abating.
(Bloomberg) — Taiwan’s export orders plummeted in May for a ninth consecutive month as a global dropoff in demand for semiconductors showed little sign of abating.
Overseas orders to Taiwanese companies shrank 17.6% last month from a year earlier to $45.7 billion, the Ministry of Economic Affairs said Tuesday. That was better than the expectation of a 21.3% plunge in a Bloomberg survey of economists.
The results were affected by inflation, rate hikes, lower end-user demand and softer prices for raw materials, according to a statement from the economics ministry.
The trade-dependent economy has struggled for months with declining demand for its exports — especially semiconductors, a key product and a major driver behind the months of drops.
Overall exports fell 14.1% in May, data released earlier in June showed, with chip shipments decreasing by 8%, widening from the prior month.
Orders from the US fell 13.5% in May from a year earlier, while orders from Hong Kong and China dropped nearly 21%. Orders from Europe declined 34.9%.
The one bright spot was Asean, where orders improved 10.2% — much higher than the 0.1% uptick in April.
Only about 15% of manufacturers expect orders to pick up in June, according to the economics ministry statement. Nearly a quarter expected them to worsen.
“The collapse in demand has caught manufacturers off guard. Inventories have risen sharply as sales have come in below expectations,” said Shivaan Tandon, emerging Asia economist at Capital Economics.
“A high level of inventories means that even when global demand does start to recover, manufacturers are more likely to respond by running down their stocks rather than by raising production.”
Taiwan has been cutting forecasts for its 2023 growth outlook in part because of the slumping trade figures.
Last week the central bank announced it expected the economy to expand 1.72% this year, which would be the weakest pace since 2015. The government’s statistics department has similarly projected the weakest growth since that year.
(Adds economist commentary.)
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