Data from Taiwan's Ministry of Economic Affairs showed that export orders grew by 21.4 % from a year earlier, for a total of $55.3 billion in July. This rise was slightly higher than expectations and partly came from a 16.5 % jump in US orders, a 20.1 % from China, 14.3 % from Europe, and 27.6 % from Japanese markets. The surge marked the 17th month of expansion for Taiwan, driven by a demand for 5G telecom equipment and semiconductors.
Promising Numbers for Exportation
In June, export orders grew by 31.1% from a year earlier to $53.73 billion. The second quarter saw a rise in exports of 8% from the first quarter and 35.9% from a year earlier to $160.96 billion. From the first half of the year, export orders increased annually by 39.2%, reaching $309.92 billion.
The significant year-on-year increases are mainly due to pent-up demand. Economies around the world had to shut down due to the COVID-19 pandemic. Companies and people worldwide were not eager to spend due to the fear of financial uncertainties. The suppressed demand thus found a release as vaccination campaigns gathered pace globally, opening up economies. Taiwanese exports have especially benefited from a world that is turning to technology to work smarter and more efficiently while socially distancing itself.
The COVID-19 pandemic has shifted work, school, and life to homes. Companies and families have found themselves needing computing resources that can help them learn, work, and entertain themselves remotely. Taiwanese companies like Foxconn and Taiwan Semiconductor Manufacturing Co Ltd (TSMC) are significant suppliers to global tech companies like Apple Inc.
Good Times Might Not Last Long
However, the spread of COVID-19 variants could damper further growth prospects. Economists are lowering the outlook on Taiwanese exports. Not only will these variants prolong economic slowdowns, but they can also disrupt the supply chain. For example, China recently had to close its third-largest port in Ningbo.
Taiwan is a critical supplier of chip products which are vital for electronic goods. Any disruption in the supply chain will hamper efforts to ease a supply backlog that came about due to previous shutdowns. Those commodities also include motor vehicles that are adopting cleantech and AI.