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Taiwan's February export orders fall short of expectations, China and US weigh in – March 20, 2024 at 9:53 am

Taiwan's February export orders fall short of expectations, China and US weigh in – March 20, 2024 at 9:53 am

Taiwan's export orders fell in February as fewer working days during the Lunar New Year festival affected production. Despite strong demand for AI applications, the outlook is clouded by geopolitical uncertainty and high interest rates.

Export orders fell 10.4% year-on-year to $37.73 billion last month, reflecting sharp declines in orders from China and the US. That missed the 1.3% increase forecast in a Reuters poll. In January, orders rose 1.9%.

Orders for goods from Taiwan, home to technology companies such as chipmaker TSMC, are an indicator of global demand for the technology.

“Demand for new technology applications continues to rise, offsetting some of the overall decline,” the economy ministry said in a statement.

This year, the week-long Lunar New Year, the most important holiday in the Chinese-speaking world, fell in February. In 2023, the Lunar New Year holiday fell entirely in January.

Orders from Taiwan for servers, many of which power the artificial intelligence (AI) revolution, rose for an eighth month in February, the ministry added.

As expected, the ministry said export orders in March rose between 0.9% and 5.2% year-on-year, with a high chance of a return to positive growth in the second quarter.

The first part of the year is traditionally the off-season for orders for the island's high-tech products.

The ministry cited the impact of higher interest rates in the US and Europe, trade conflicts between China and the US and general geopolitical uncertainty as risks.

Weak demand for Taiwan's technology products amid global economic uncertainty has caused the export-oriented economy to grow at its slowest pace in 2023, although the government expects faster growth this year.

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Taiwan's orders for telecommunications products fell 11.3% year-on-year in February, while electronics products fell 4.3% year-on-year, the ministry said.

Orders from China fell 5.5% compared to a 28% increase in the previous month. Orders from the US fell 5.8%, compared with a 2.7% increase in January.

Orders from Europe fell 35.6%, better than the 50% decline in January.

From Japan, orders fell 28.0% last month, worsening from January's 21.2% decline. (Reporting by Emily Chan and Faith Hung; Editing by Himani Sarkar)