Taiwan export orders fall for first time in 2 years, hurt by China lockdowns, global weakness

TAIPEI: Taiwan's export orders - a bellwether for global technology demand - fell for the first time in 25 months in April, taking a larger-than-expected hit from COVID-19 lockdowns in China and broader global supply chain disruptions.

Export orders unexpectedly fell 5.5 per cent from a year earlier to US$51.9 billion last month, data from the Ministry of Economic Affairs showed on Friday (May 20).

The decline was the first in more than two years, since the COVID-19 pandemic began sweeping the world in 2020, and up-ended analysts' forecasts for 8.3 per cent growth.

Orders for telecommunications products dropped 21.5 per cent on-year due to government measures to control the spread of COVID-19 in China, the ministry said.

Orders for electronic products edged up 4.3 per cent, with China's lockdowns "deepening the supply and demand imbalance", the ministry said.

Growth in the past two years or so had been supported by booming tech demand fuelled by the work and study from home trend during the COVID-19 pandemic, as well as a global semiconductor shortage that has filled Taiwanese chip makers' order books.

The ministry said it expects export orders in May to be in a range of a fall of 1.1 per cent and an expansion of 1.7 per cent from a year earlier.

In March, export orders rose 16.8 per cent from a year earlier to $62.69 billion, the highest figure for the month on record.

April orders from China fell 16.9 per cent, compared with an increase of 9.1 per cent n the previous month, while orders from the United States in April dropped 0.2 per cent from a year earlier, compared with the 18.9 per cent growth logged in March.

Orders from Europe shrank 17 per cent, compared with a growth of 20.1 per cent in March, while those from Japan fell 11.3 per cent.

Dozens of cities in China were under full or partial COVID-19 lockdowns in April and May, slashing demand and paralysing supply chains. Shanghai is just beginning to ease restrictions and analysts warn it could take weeks or even months for conditions to stabilise.

Roughly half of Taiwanese companies that had previously suspended work in China due to COVID-19 control measures have resumed production as curbs ease, the island's economy minister said on Thursday.

Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd (TSMC) are major suppliers to Apple Inc, Qualcomm Inc and other global tech firms.