Taiwan exports surge to record amid Huawei scramble for chips

Taiwan’s exports rose to a record in August, aided by suppliers rushing to ship as many components as possible to Huawei Technologies Co. before a U.S. ban on sales to the company comes into effect next week.

• Overseas shipments from Taiwan increased 8.3% last month to a record high of $31.2 billion, according to a statement from Taiwan’s Ministry of Finance Monday. That was more than even the most bullish estimate in a survey of 13 economists, which had a median forecast of a 0.8% gain.
• Imports unexpectedly rose 8.5% and the trade surplus widened to $6.47 billion.

Key Insights

• The size of the increase was “unexpectedly strong,” according to the ministry’s chief statistician Beatrice Tsai, who also cited the upcoming launch of new smartphones as a contributing factor.
• There were four main drivers of the export surge, according to the finance ministry’s statement: the impending U.S. ban on technology sales to Huawei, rising demand for technology products to allow people to work and study at home amid ongoing Covid-19 lockdowns, a seasonal pick-up in demand in the second half of the year, and stabilizing global material prices. The grace period for Huawei’s U.S. export ban ends on Sept. 14.
• Huawei helped added between $1.5b and $2b to MOF’s original estimates for August exports, Tsai said.
• The outlook for Taiwan’s exports will remain solid as more high-end production is brought back to the island, said Australia & New Zealand Banking Group Ltd.’s Greater China chief economist Raymond Yeung, the most accurate economist in Bloomberg’s survey.
• Exports to China including Hong Kong, Taiwan’s biggest trading partner, rose 22.9% even as Chinese imports unexpectedly fell last month. That was the biggest gain since February. Shipments to the U.S. rose 13.8%.