Taiwan’s exports continue growing on strong demand for chips

Taiwan added to signs the global economy is shaking off the effects of the coronavirus pandemic, with exports rising for an eighth straight month in February.

Overseas shipments rose 9.7% last month to a record high for February, fueled by exports of electronics and semiconductors, the Ministry of Finance said Tuesday in Taipei. Imports rose 5.7% and the trade surplus was $4.51 billion.

Exports will likely grow between 15% and 20% this month with display panels joining semiconductors as a new driver of growth due to supply shortages and rising prices, the ministry’s chief statistician Beatrice Tsai said at a briefing.

The latest data from Taiwan adds to signals from other exporting economies in the region that demand is improving in the U.S. and Europe. South Korean exports increased 9.5% in February from a year earlier while Chinese shipments jumped 60.6% in dollar terms in January and February combined.

Export growth figures are usually distorted in the first two months of the year due to the Lunar New Year holiday, which was in February this year.

Taiwan’s major technology companies have been scrambling to keep up with surging overseas demand in recent months. Hon Hai Precision Industry Co., the main assembler of Apple Inc’s iPhone, reported an almost 85% surge in revenue to NT$401.9 billion ($14.2 billion) in February. The island’s largest company, Taiwan Semiconductor Manufacturing Co., releases its February sales data Wednesday.

Taiwan’s technology advantage over rival exporting economies puts it in a “unique and strong” position, according to Angela Hsieh, a regional economist for Barclays Plc in Singapore.

“Taiwan’s growth outlook will continue to be supported by buoyant tech demand, especially for its foundry industry,” she said. “The global chip shortage underscores the extremely tight supply conditions across major end-products.”

Taiwanese employers also appear to be confident, with local companies showing the strongest intention to hire more staff in the second quarter in a ManpowerGroup Inc. survey of 43 markets worldwide.

The government more than doubled its forecast for export growth this year to 9.6%, citing increased demand for Taiwan’s semiconductors. Officials warned however this may add to pressure on the local currency to appreciate further. The Taiwan dollar has strengthened more than 6% over the past 12 months against the U.S dollar, the second biggest gain among Asian peers after the Chinese yuan.