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Technology

UPDATE 1-Taiwan Dec exports fall again, economy seen staying in recession

* Dec exports -13.9 pct y/y vs -13.15 pct in poll

* Taiwan likely stayed in recession in Q4- economists

* 2015 exports down 10.6 pct, worst fall since 2009

* U.S. Dec exports -7.3 pct y/y; China -16.4 pct

By Faith Hung and Roger Tung

TAIPEI, Jan 8 (Reuters) - Taiwan’s exports plunged by more than expected in December, which might keep the trade-reliant economy in recession in the fourth quarter and could mean the central bank cuts interest rates again.

December exports were down 13.9 percent from a year earlier, an 11th straight decline, the finance ministry on Friday. A Reuters poll forecast a 13.15 percent fall and November had a 16.9 percent slide.

Exports for 2015 fell 10.6 percent, the biggest annual drop since a 20.3 percent contraction in 2009, due to sluggish demand from China and other global markets. In 2014, exports jumped 2.7 percent, thanks to Apple Inc’s iPhone.

Trends in Taiwan’s exports are a gauge for global technology product demand.

Taiwan’s economy slipped into recession in the third quarter. The central bank cut interest rates in September and December.

“There is still no sign Taiwan’s economy will pick up into the first half of 2016,” Andrew Tsai, an economist of KGI Securities, Taipei, said before the data was released.

“With the global economy in such a tough situation, there is room for the central bank to slash the rate by 12.5 basis point each in Q1 and Q2.”

Fourth-quarter gross domestic product (GDP) data will be announced on Jan. 29.

DEMAND WEAKENING

Taiwan is home to many suppliers that make components or assemble gadgets for global brands such as Apple.

Foxconn, which assembles most of the latest iPhones, will cut working hours over the week-long Lunar New Year holiday, a person familiar with the matter said on Wednesday, a rare move analysts interpreted as a sign of softening demand.

Taiwan Semiconductor Manufacturing Co (TSMC), the world’s biggest contract chip maker, said its December sales fell both on-month and on-year. The annual growth in sales for 2015 more than halved from the rapid pace of 2014, when new iPhone 6 models were launched.

December exports to China fell 16.4 percent, compared with a 19.6 percent slump in November. Exports to the U.S. fell 7.3 percent, after contracting 10.9 percent in November.

For all of 2015, exports to China were down 12.3 percent, and to the U.S. by 1.7 percent.

Imports fell 15.6 percent in December against the forecast 13.2 percent drop and the 13.7 percent fall in November.

“Electronics export momentum is expected to pick up gradually,” the finance ministry said. “However, outlook of Taiwan’s exports will be dented by the slowdown of global economic growth, growing international competition, falling raw material prices and China’s expanding capacity.”

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