Taiwan's August Export Orders Exceed Expectations Driven by AI Demand
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Taiwan August export orders beat forecasts on solid demand for AI
TAIPEI (Reuters) - Taiwan's export orders exceeded expectations in August as demand for chips used for artificial intelligence (AI) applications continued to climb, with the government seeing the strong momentum extending to the rest of the year. Export orders last month rose 9.1% to $50.22 billion from a year earlier, the Ministry of Economic Affairs said on Tuesday. That beat the 8.35% gain forecast in a Reuters poll and topped July's 4.8% expansion. Orders for goods from Taiwan, home to tech giants such as chip manufacturer TSMC, are a bellwether of global technology demand. The orders growth was thanks to "continued demand for AI, high-computing and cloud industries, as well as preparation of new consumer electronics products," the ministry said in a statement. Looking ahead, the ministry expects export orders momentum to sustain as new applications such as AI and high-speed computing keep rolling out and consumer electronics products enter the traditional hot season in the second half of the year, the statement added. The ministry said it expects export orders in September will increase between 4.7% and 8.6% year-on-year. Taiwan's orders in August for telecommunication products were up 16% from the prior year, while electronic products rose 13.2% from a year earlier. Overall orders from China edged up 2.6% versus a 0.1% fall in the prior month. Orders from the United States advanced 11.2%, versus a 14.3% gain in July. Orders from Europe rose 8.3% in August after climbing 6.1% in July. From Japan, orders were up 2.1% last month, versus a rise of 2.4% in July. (Reporting by Faith Hung and Jeanny Kao; editing by Jason Neely and Andrew Heavens)
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Taiwan August export orders beat forecasts on solid demand for AI
TAIPEI, Sept 24 (Reuters) - Taiwan's export orders exceeded expectations in August as demand for chips used for artificial intelligence (AI) applications continued to climb, with the government seeing the strong momentum extending to the rest of the year. Export orders last month rose 9.1% to $50.22 billion from a year earlier, the Ministry of Economic Affairs said on Tuesday. That beat the 8.35% gain forecast in a Reuters poll and topped July's 4.8% expansion. Advertisement · Scroll to continue Orders for goods from Taiwan, home to tech giants such as chip manufacturer TSMC (2330.TW), opens new tab, are a bellwether of global technology demand. The orders growth was thanks to "continued demand for AI, high-computing and cloud industries, as well as preparation of new consumer electronics products," the ministry said in a statement. Looking ahead, the ministry expects export orders momentum to sustain as new applications such as AI and high-speed computing keep rolling out and consumer electronics products enter the traditional hot season in the second half of the year, the statement added. Advertisement · Scroll to continue The ministry said it expects export orders in September will increase between 4.7% and 8.6% year-on-year. Taiwan's orders in August for telecommunication products were up 16% from the prior year, while electronic products rose 13.2% from a year earlier. Overall orders from China edged up 2.6% versus a 0.1% fall in the prior month. Orders from the United States advanced 11.2%, versus a 14.3% gain in July. Orders from Europe rose 8.3% in August after climbing 6.1% in July. From Japan, orders were up 2.1% last month, versus a rise of 2.4% in July. Reporting by Faith Hung and Jeanny Kao; editing by Jason Neely and Andrew Heavens Our Standards: The Thomson Reuters Trust Principles., opens new tab
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Taiwan's export orders in August surpassed forecasts, showing a year-on-year increase for the first time in 13 months. The growth is primarily attributed to strong demand for artificial intelligence (AI) applications.
Taiwan's Export Orders Show Positive Growth
Taiwan's export orders in August 2023 have shown a surprising upturn, breaking a 13-month streak of year-on-year declines. The island nation, known for its pivotal role in the global tech supply chain, saw its export orders rise by 3.1% compared to the same period last year, reaching $53.39 billion
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. This figure significantly outperformed economists' expectations, who had predicted a more modest 0.6% increase2
.AI Demand Fuels Growth
The primary driver behind this unexpected growth is the robust demand for artificial intelligence (AI) applications. Taiwan's economy ministry highlighted that orders for AI-related components have remained steady, contributing substantially to the positive figures
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. This trend underscores the growing importance of AI technologies in various sectors and Taiwan's strategic position in supplying critical components for these advancements.Sector-Specific Performance
While the overall picture is positive, the growth was not uniform across all sectors:
- Electronic products, including those used in AI applications, saw a significant 9.2% increase
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. - Telecommunications products experienced a notable rise of 11.6%
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. - However, the traditional information and communication technology (ICT) products sector faced a decline of 1.5%
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Regional Order Dynamics
The export order data also revealed interesting patterns in terms of regional demand:
- Orders from the United States surged by 15.6%, indicating strong demand from the world's largest economy
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. - China's orders saw a slight decrease of 1.2%, reflecting ongoing economic challenges in the mainland
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. - European orders declined by 14.9%, suggesting economic headwinds in the region
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Future Outlook
Looking ahead, Taiwan's economy ministry has expressed cautious optimism. They forecast that September's export orders are likely to show a year-on-year increase between 3.5% and 7.5%
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. This positive outlook is tempered by acknowledgment of potential challenges, including global economic uncertainties and geopolitical tensions.Related Stories
Implications for Global Tech Supply Chain
Taiwan's improved export performance, particularly in AI-related components, highlights its crucial role in the global technology ecosystem. As AI continues to gain prominence across industries, Taiwan's ability to meet this demand could have far-reaching implications for technological advancement and economic growth worldwide.
Economic Indicators and Analysis
Economists view this unexpected growth as a potential sign of recovery in the tech sector. However, they caution that sustained growth will depend on various factors, including global economic conditions, geopolitical stability, and continued innovation in the AI and tech sectors
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.As Taiwan navigates these complex dynamics, its export performance will remain a key indicator of both its economic health and the broader trends in the global technology market.
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