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UPDATE 1-Taiwan April exports outperform as tech shipments hit record
May 7, 2014 / 9:10 AM / in 3 years

UPDATE 1-Taiwan April exports outperform as tech shipments hit record

(Adds details, comments from ministry, economist)

* April exports +6.2 pct vs +5.79 pct in Reuters poll

* Exports to China +5 pct y/y, U.S. +6.9 pct y/y

* Tech exports reach new single-month record

By Jeanny Kao and Michael Gold

TAIPEI, May 7 (Reuters) - Taiwan’s exports in April rose faster than expected boosted by record tech shipments, a development that bodes well for its key electronic firms and underpins the island’s growth prospects.

The tech industry, the main driver of Taiwan’s export machine, has been facing upheaval from changing consumer tastes worldwide but local companies have lately benefitted from the roll-out of new models of smartphones and tablets.

The Ministry of Finance said that exports of electronic goods in April reached $8.16 billion, a record high, as firms moved up the value chain producing high-margin devices such as top-of-the-line phones.

Exports overall increased by 6.2 percent last month from a year earlier, beating the average forecast of 5.79 percent in a Reuters poll of 11 economists.

The figure compares with 2 percent export growth in March - a modest figure that, nonetheless, also beat expectations.

“Taiwanese manufacturers continue to occupy the most advanced rung of the global technological supply chain,” the ministry said in a statement.

Exports to China, Taiwan’s largest trading partner, rose 5 percent, while those to the United States saw a 6.9 percent gain.

Exports to Europe jumped 13.1 percent, while those to Japan fell 3.2 percent.

Strong export growth bolsters the island’s first-quarter GDP expansion of 3.04 percent - the highest since the fourth quarter of 2012 - in which both exports and domestic consumption were cited as major growth factors.

A slowdown in China is viewed as a potential threat to Taiwan’s export machine. Many local manufacturers have factories on the mainland or ship components to China for assembly.

Chinese GDP growth clocked in at its slowest pace in 18 months during the first quarter, causing Taiwan’s exports to China to contract slightly in March.

However, Tim Condon, an economist at ING in Singapore, said that a slowing of the Chinese economy could be a net positive for Taiwan if it leads to more consumption-fuelled growth.

“This could definitely be a virtuous cycle, with Taiwan outsourcing manufacturing to places like Southeast Asia, but then importing to China,” Condon said.

He said progress in cross-strait pacts such as the controversial Trade in Services Agreement, which has been the target of heated protests, would be crucial for this development.

Data on imports to China in April, to be released on Thursday, are expected to see a tiny 0.30 percent increase, on the back of a substantial 11.27 percent fall in March.

BRIGHT TECH PICTURE

The few large tech firms that have reported their first-quarter earnings have painted a relatively bright picture for the first half of the year.

Taiwan Semiconductor Manufacturing Co Ltd, the world’s largest contract chip maker, targets record revenue in the second quarter as more of its chips are installed in high-end smartphones worldwide.

Even struggling smartphone firm HTC Corp said on Tuesday it was likely to break even or book a profit in the first half, after losing substantial market share to rivals Apple Inc and Samsung Electronics Co Ltd. (Editing by Jacqueline Wong)

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