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UPDATE 1-Taiwan export order value hits new high in Sept on tech boom
October 20, 2017 / 9:44 AM / in a month

UPDATE 1-Taiwan export order value hits new high in Sept on tech boom

(Adds details, comments)

* Taiwan Sept orders +6.9 pct y/y vs +7.1 pct in Reuters poll

* Orders from China +14.6 pct y/y, U.S. +2.2 pct y/y

* Slower product rollouts now could see orders pick up - ministry

By Jess Macy Yu

TAIPEI, Oct 20 (Reuters) - Taiwan’s export order value hit its highest on record in September, with manufacturers pinning their hopes on Apple’s new smartphones to sustain momentum into the year-end shopping season.

Buoyant export orders, underpinned by a global economic upswing and strong demand for electronics, is set to help export-reliant Taiwan meet its GDP forecast, which was bumped up to 2.11 percent earlier this year. Analysts expect further economic momentum into 2018 as the island’s factories continue to see strong orders.

September export orders rose 6.9 percent from a year earlier to $45.92 billion, the Ministry of Economic Affairs said on Friday. The pace was slightly slower than analysts’ expectations of 7.1 percent growth, and down from 7.5 percent in August.

Export orders totalled $40.8 billion in August.

The ministry said in a statement that information communication devices hit a new high last month by volume.

ANZ said it expects the momentum to extend into 2018 as exports rise through the year-end holiday season.

“Taiwan’s economic recovery has been slow but sure, amid improving global demand and its strong presence in the global electronics supply chain,” ANZ said in a research note before the data.

U.S. export orders grew 2.2 percent, after declining in August, but growth in orders from Europe slowed to 2.9 percent from 21.3 percent.

“September export orders were not very far from forecasts. Even though Apple launched its iPhone 8 products, the effect of the orders was not very large. Everyone is waiting for the postponed sales of the iPhone X to give a boost to Oct-Nov export orders,” said Kevin Wang, economist at Taishin Investment advisory company.

Taiwan’s export orders are a leading indicator of demand for Asia’s exports and for hi-tech gadgets such as Apple’s new iPhone 8 as well as the iPhone X, which is expected to be shipped starting Nov. 3.

BIG LAUNCH AHEAD

Lee-Jen Lin, director of the department of statistics, told a news conference that orders could pick up in the coming months as some product launches had been rolled back.

But there are concerns over signs of weak demand for the iPhone 8, which caused analysts and investors to question the company’s staggered release strategy for its latest phones.

Wireless carriers in the United States and Canada have reported slow third-quarter customer upgrades. While some expect a pick-up after the iPhone X goes on sale in November, others cautioned that the phone’s high price tag could weigh on demand.

The shares of some Taiwan tech gadget suppliers such as Largan Precision Co Ltd slipped on Friday, following media reports about tepid demand for the iPhone 8.

Some blue-chip companies, however, are optimistic about the fourth quarter.

Taiwan Semiconductor Manufacturing Co, a top contract chip maker, said on Thursday it sees revenue growth of 10 percent in the fourth quarter from the third, ahead of the iPhone X launch. (Additional reporting by Roger Tung in TAIPEI and Clare Jim in HONG KONG; Editing by Jacqueline Wong)

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