Taiwan’s export orders keep soaring on robust tech demand

Taiwan’s exporters overcame a traditional lull over the Lunar New Year holiday to continue their strong start to the year as overseas demand for their products registered a fourth straight month of double-digit growth.

Export orders rose 48.5% to $42.6 billion in February, according to Taiwan’s Ministry of Economic Affairs Monday. That compares to the median 45.4% estimate in a Bloomberg survey of economists. The data includes orders to Taiwanese companies producing at home and overseas.

While data in the first two months of the year is often volatile due to the Lunar New Year, the year-on-year increase could also be further distorted by the fact that Taiwanese-owned factories in China were closed in February last year in the early stages of the coronavirus pandemic.

Still, the latest numbers add to strong signals from Taiwan’s dominant technology sector. The combined revenue of seven major Apple Inc. suppliers surged 44.5% in February, the biggest increase since Bloomberg started compiling the data in 2018.

The ministry predicts growth of between 35.4% and 39.1% in orders this month. If that was achieved it would set a new first-quarter record, said Huang Yu-lin, director of the ministry’s statistics department.

Just as demand booms, Taiwan’s exporters are receiving additional welcome news in the form of a weakening currency. The Taiwan dollar has slumped about 1% over the past six sessions to trade weaker than its 50-day moving-average for the first time in almost a year, driven by a global weakness in technology shares.

With the US, Europe and elsewhere starting to administer vaccines, the global economy will hopefully enter a period of recovery that should drive export orders, Huang said.

However, “we’ll need to keep a close eye on how things play out” in the near term, Huang said, citing the inherent unpredictability of a pandemic situation as vaccinations are gradually rolled out.