TAIPEI (Reuters) – Taiwan’s export orders contracted for a fourth straight month in December, hit by slumping Chinese demand and weaker global consumer spending due to inflation and interest rate hikes.
The island’s export orders, a bellwether for global technology demand, slid 23.2% from a year earlier to $52.17 billion, the Ministry of Economic Affairs said on Tuesday. That was better than analysts’ expectations for a 25.6% decline.
December’s drop followed a 23.4% fall in November. December was still the third highest on record in value terms for the month, the ministry added.
“To see a reverse trend in orders, it still hinges on end-user demand. So far we have not heard positive news,” Huang Yu-ling, director of the ministry’s statistics agency, told a news conference.
Huang said first-quarter orders could be affected by continuing weak global demand as well as a high base from last year.
Orders for telecoms products plummeted 24.1% from a year earlier because of weaker consumer demand especially in China, but also came off a high base, the ministry said.
Orders for electronic products fell 20.9%, though the decline was offset by demand for chips for high-performance computing, 5G and automobiles, it added.
While semiconductor demand driven by those new technologies would help orders, there were also big uncertainties ahead, including global economic downturns amid high inflation, interest rate hikes and the war in Ukraine, it added.
The ministry added that it expected export orders this month to be lower than in January 2022 by between 32.1% and 35.5%.
Taiwanese firms, such as Taiwan Semiconductor Manufacturing Co Ltd, are major suppliers to Apple Inc, Qualcomm Inc and other global tech companies.
Taiwan’s December orders from China nosedived 37.7% from a year earlier, versus November’s annual fall of 37.3%. Month-on-month orders from China rose 3.6% helped by the lifting of COVID-19 controls there.
China last month began easing its stringent zero-COVID policy that had led to widespread public frustration with lockdowns and damage to the world’s second-largest economy, but has since been dealing with a rapid rise in cases.
Taiwan’s orders from the United States fell 14.7% from a year earlier, compared with a drop of 16.7% the previous month.
Export orders from Europe dropped 23.9%, versus November’s annual fall of 26.3%. Orders from Japan expanded 5%.
(Reporting by Yimou Lee and Jeanny Kao; Editing by Jacqueline Wong)
