August export orders slower, but smartphone sales raise
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[September 22, 2014]
By J.R. Wu and Emily Chan
TAIPEI (Reuters) - Taiwan's
export order growth was below forecast in August, but
prospects in coming months will be helped by solid
demand for tech goods, especially as Apple's newest
iPhone hits the market.
Some delays have affected orders but they are starting to build up
for the iPhone 6 and 6 Plus since Apple Inc's <AAPL.O> launch
earlier this month, Lin Li-jen, an official with the Ministry of
Economic Affairs, told a news conference. "We have not seen orders
for such international brands in August export orders because there
have been delay issues."
Lin, who is the director general of the statistics department at the
ministry, did not elaborate on the delay but said she expects
smartphone-related orders to become more apparent after September.
Taiwan's export orders last month reached $38.21 billion, mostly
flat compared to the value in July. But the year-on-year growth rate
at 5.2 percent came in below a Reuters poll of economists who
forecast a median 7.4 percent growth.
Among the categories, orders for electronic products in August grew
12.6 percent from a year earlier, while those for machinery rose a
stronger 17.4 percent.
Taiwan's export orders are seen as a leading gauge of demand for
Asia's exports and high tech devices. The island's tech
manufacturers design and churn out many of the parts and products
found in smartphones, gameboxes and personal computers.
The latest iPhone is packed with parts made by Taiwanese tech
component makers and assembled by major contractors including Hon
Hai Precision Industry Co Ltd.
Orders typically lead actual exports by two to three months, but
sometimes quick turnaround times in the production of consumer
electronics lead to the data being less predictable. Also, many
Taiwanese factories are located in mainland China from which final
exports are shipped.
Lin said that the ministry expects Taiwan's export orders for the
year to reach a record high of $450 billion. For the first eight
months of this year orders stood at $296.85 billion.
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"The external outlook for Taiwan is still positive," said Raymond
Yeung, a senior economist at ANZ in Hong Kong.
Taiwan was outperforming South Korea's tech exports this year,
underpinned by the current iPhone 6 cycle, said Tim Condon, an
economist with ING Singapore. "It is a hero-product cycle and when
this cycle is over we'll be back to low-single-digit growth," Condon
added, referring to the iPhone 6.
On a month-on-month basis, the August revenue for Taiwan
Semiconductor Manufacturing Co rose for the second straight month in
August, while posting a strong 26 percent on-year growth rate.
Credit Suisse said in a research report earlier this month that it
was optimistic about the momentum of Taiwan's tech exports and
production in the second half due to new smartphone model launches.
(Additional reporting by Michael Gold; Editing by Jacqueline Wong)
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