Taiwan's export orders rise to new high in July spurred by AI demand

Taipei, Aug. 20 (CNA) Taiwan's export orders jumped to a record high of US$57.64 billion in July, marking the sixth consecutive month of year-on-year growth, the Ministry of Economic Affairs (MOEA) said Wednesday.

The US$57.64 billion total, the highest ever recorded for the month of July, was a 15.2 percent year-on-year increase that beat the forecast of 7.9 to 11.9 percent, said Huang Wei-jie (黃偉傑), head of the MOEA's Department of Statistics.

The record export growth was driven mainly by sustained high demand for AI and high-performance computing products, he said at a press conference.

In the month of July, exports of electronic products such as integrated and printed circuit boards increased 24.8 percent from the previous year to US$22.59 billion, according to the MOEA.

AI and cloud-related applications also spurred orders for information and communications products, including servers and graphics cards, with exports rising 15.5 percent year-on-year to a record US$16.32 billion, the MOEA said.

In the traditional industries, exports of chemical products rose 7.8 percent from the previous year, while exports of basic metals, and plastic and rubber products declined by 12.6 percent and 10.3 percent, respectively, the MOEA said. The data showed that they were the only two major product categories that recorded negative year-on-year export growth in July.

Huang said the Cabinet has rolled out new policies in support of the traditional industries, which are likely to be hardest hit by the higher U.S. tariffs on Taiwan. However, the full impact on those industries remains to be seen, he added.

Taiwan's main competitors in the supply of high-end machine tools are Japan and Germany, which have been subject to lower U.S. tariffs than Taiwan, Huang noted. For the supply of low-end machine tools, Taiwan's main competitor is China, which is facing higher U.S. tariffs, suggesting less of an impact on that industry in Taiwan, he said.

As the U.S. advocates for the return of its manufacturers, orders for Taiwan's automation equipment for mechanical products rose to US$1.77 billion in July, 6.2 percent higher than in the previous year, Huang said.

In the long term, the expansion of semiconductor fabs will drive continued growth for Taiwan's semiconductor and automation equipment, he said.

It is also possible, however, that the higher tariffs will lower demand, leading to delayed or suspended investments, which in turn will affect orders for Taiwan's machinery products, he added.

Regarding new electronic products, Huang said orders are expected to rise in August or September -- the peak launch period for such products -- while the current orders are primarily for stocking up for upstream components.

Meanwhile, there has been a slowdown in the orders that were placed for products in advance of the higher U.S. tariffs, Huang said, citing reports from companies in Taiwan's metal, machinery, and plastics and rubber industries. Some firms have even reported a decline in orders, he said.