Taiwan export orders beat expectations in Sep on surge in demand for electronics

Export orders in Taiwan surged during the month of September, beating what markets had initially anticipated, following a surge in demand for electronic devices. Majorly, rising demand for Apple’s iPhone 7 series, in the wake of Samsung’s safety issues pushed the country’s export orders higher.

Taiwan’s September export orders came in better than expected at 3.9 percent y/y. Although this was a slower rate compared to 8.3 percent in August, the result was encouraging after taking into account the high base in the year-ago period. On a seasonally adjusted monthly basis, export orders also increased a steady 1.3 percent in September.

Orders for electronics components rose 10.1 percent and information & communication products surged 8 percent in September. Reflected in the market sources, strong demand was primarily seen from the US at 12.9 percent.

However, orders for non-tech products including chemicals fell -10.3 percent and plastics and rubbers witnessed a decline of -7.3 percent during the period. Demand from China & Hong Kong rose 3.7 percent, Europe 1.8 percent and ASEAN-6 at 1.7 percent also saw slower growth last month.

The sales outlook of iPhone 7 could be better than expected due to the recall of the new smartphone product at Samsung. This should indirectly benefit Apple’s Taiwanese suppliers. Accordingly, Taiwan’s GDP growth is likely to improve more than expected in during the second half of 2016.

"A renewed slowdown is expected for 1H17 as the Apple effect dissipates," DBS commented in its latest research report.