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UPDATE 1-Taiwan's solid June export orders point to H2 momentum
July 20, 2017 / 9:25 AM / 4 months ago

UPDATE 1-Taiwan's solid June export orders point to H2 momentum

(Adds details, comments)

* June export orders +13.0 pct vs 7.55 pct Reuters poll f‘cast

* Orders from China +17.3 pct y/y, from U.S. +13.1 pct y/y

* Ministry sees July order value decreasing from June

TAIPEI, July 20 (Reuters) - Taiwan’s export orders rose faster than expected in June helped by strong global growth and robust demand for electronic components, a positive sign for high-tech manufacturers heading into the traditionally busier second half of the year.

The island’s export orders rose for the 11th successive month in June and returned to double-digits, with strong exports of chips and other tech devices setting the export-economy up for a strong second half, analysts said.

June orders rose 13.0 percent from a year earlier, widely beating the median growth forecast of 7.55 percent in a Reuters poll and better than the most optimistic forecast. Orders rose 9.1 percent in May and 7.4 percent in April.

The data is an indication of the strength of Asian exports and of global demand for technology.

June’s export order growth was driven more by a rise in supply chain component orders than smartphone-related orders, Taiwan’s economics ministry said.

“The momentum for future export orders will be driven by the electronics industry entering its peak season, and along with good economic activity. The forecast is that the orders will maintain a good degree of growth,” said analyst Kevin Wang of Taishin investment advisory company.

“We expect that third quarter export orders may reach double-digit figures on average compared to a year ago,” he added.

Orders from China and the United States - its two biggest markets - rose 17.3 and 13.1 percent. In May, they climbed 14.5 percent and 10.2 percent, respectively.

Europe orders jumped 13.8 percent and from Japan, 19.7 percent.

The ministry said July export orders were expected to reach $38 billion to $39 billion, and grow between 8.5 percent and 11.3 percent from a year earlier.

Some companies in Taiwan expect their own orders to pick up in the next quarter.

Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker and a key Apple supplier, posted an 8.6 percent fall in second-quarter net profit but sees revenue in the third quarter rising from the second quarter.

New gadget launches in the second half, particularly smartphones, will help boost revenue for the third quarter by at least 15 percent versus the second quarter that ended in June, TSMC said.

Reporting by Liang-sa Loh, Jeanny Kao and Jess Macy Yu; Editing by Jacqueline Wong

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