Record semiconductor shipments fuel Taiwan’s export growth

Taiwan’s exports continued to grow in June as exporters kept their factories running even as restrictions aimed at containing an outbreak of Covid-19 weighed heavily on other sectors of the economy.

Exports rose 35.1% last month from a year earlier to $36.7 billion, the second-highest amount on record, according to a statement Wednesday from Taiwan’s Ministry of Finance. Overseas shipments in the second quarter were a record $109 billion, the first time they’ve exceeded $100 billion in any three-month period, the ministry’s chief statistician Beatrice Tsai said at a briefing in Taipei.

The increase in June continued the strong surge in shipments seen all year, which has primarily been fueled by demand for Taiwan’s integrated circuits and electronic components. Exports for both categories rose to record monthly highs.

The 26 consecutive months of growth for electronic components is the longest growth cycle in 16 years, according to Tsai, and is likely to continue in July. Officials forecasts are for shipments to increase between 29% and 33% this month.

Exports to China and the U.S. were the main drivers of June’s gains, increasing 37.8% and 34.5% from last year, respectively. Total imports increased 42.3% to $31.5 billion while the trade surplus widened from the same month last year to $5.2 billion.

Taiwan was battling a flare up of Covid cases in May and June that prompted the government to urge companies to allow staff to work from home, as well as shutting schools, recreation facilities and entertainment venues. Unemployment in May rose to its highest level in almost eight years as the soft lockdown forced restaurants, gyms and construction sites to cut back on staffing numbers.

However the export sector, led by the major chip and electronics suppliers, was largely unaffected. The government is confident of allowing the economy to slowly open up as the vaccination program progresses. Officials aim to have inoculated between 20% and 25% of population by the end of July.