TAIPEI- Taiwan’s exports rose more than expected in June, with the island benefiting from its position as a key link in the supply chain of the booming artificial intelligence (AI) industry though also coming off from a low base period.
Exports rose 23.5 percent from a year earlier to $39.9 billion, the finance ministry said on Tuesday.
Taiwan’s export recovery continued with its eighth consecutive monthly rise, and exceeded the 11.45 percent forecast in a Reuters poll, while beating a 3.5 percent gain in May.
The robust performance was thanks to “strong business opportunities in new technology applications” such as AI and high performance computing, the ministry said in a statement.
The second half of the year should see a continued uptrend in export momentum as exports enter their peak season, owing to the island’s advanced chip production capacity, it added.
Taiwanese firms such as TSMC the world’s largest contract chipmaker, are major suppliers to Apple Nvidia and other tech giants.
The ministry predicted that Taiwan’s exports in July could rise between 3 percent and 6 percent from a year earlier.
Exports to the United States soared 74.2 percent , compared with a 36.4 percent surge in May.
Shipments to China – Taiwan’s largest trading partner – improved, up 7.3 percent in June on-year versus the previous month’s 5.3 percent drop.
Taiwan’s total shipments of electronic components rose 7.3 percent in June from a year earlier to $14.58 billion, with semiconductor exports gaining 7.6 percent .
Taiwan’s imports jumped 33.9 percent to $35.22 billion in June, above economists’ forecasts for a 15 percent gain.
Taiwan’s trade-reliant economy is expected to grow at a faster pace in 2024 than previously forecast, owing to high demand for AI applications abroad and solid consumption at home, the statistics office said.
Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia, and is home to the world’s largest contract chipmaker, TSMC.
Taiwan’s gross domestic product this year is now expected to be 3.94 percent higher than last year, the Directorate General of Budget, Accounting and Statistics said, revising upward the 3.43 percent forecast it issued in February.
“The higher forecast is mainly because of substantial exports,” the agency told reporters. “The key factor is AI, which is developing very fast.”
Exports of electronic components, information and telecommunications and video and audio products hit $95.1 billion from January to April, rising 25.1 percent year-on-year, it said.
The statistics agency now sees 2024 exports growing by 10.06 percent versus last year, up from 6.14 percent predicted earlier. In 2023, exports dropped by 9.8 percent year-on-year.
“The robust global semiconductor cycle is positive for Taiwan’s growth outlook… Local consumption is equity-linked. The strong performance of the stock market generates positive wealth effect and backs retail sales,” ANZ said in a report.
