Taiwan's exports to the US more than doubled in August thanks to the booming AI industry and increased demand for chips. This increase offset the decline in demand from China.
Taiwan's Exports Exceeded Forecasts
According to Taiwan's Ministry of Finance, total exports jumped by 16.8% in August to $43.64 billion year-on-year. This growth exceeded the projected 7.35% increase and July's gain of 3.1%, representing the 10th successive monthly rise. The Ministry of Finance noted that AI and high-performance computing businesses and international brands stocking up on new products were the main contributors to the record figures. The ministry projects that growth will continue in the second half of the year due to the holiday shopping season in Western markets such as the US and Europe. In August, exports to the US surged by 78.5%, a record compared to the 70.3% growth reported in July. Exports to China turned around from a 13% decline in July to a 1% growth in August. According to Reuters, total shipments of electronic components rose by 1% to $15.15 billion, although semiconductor exports fell by 0.5%.
Taiwan Firms Supply Leading Companies
According to Reuters, Taiwan's companies such as TSMC are major suppliers to Apple, Nvidia, and other tech giants. The demand for AI products continues to grow as the technology gains traction globally due to its transformative capabilities. North America remained the fastest-growing export market for Taiwan's products in August, recording a 75.3% year-on-year growth, while Central America saw a 39.3% growth and the Middle East 11.8%. According to ING, exports to Asia recovered, registering a 3.3% year-on-year growth from a negative position of 8.3% in July, supported by a recovery in exports to mainland China and Hong Kong. By product category, most of Taiwan's exports were in machinery and electrical equipment, which constituted about two-thirds of total exports. The category grew by 22% compared to 6.6% growth in July year-on-year, outpacing the year-to-date growth of 18.6%.
Imports Slow Down
While exports showed significant growth in August, imports slowed down. According to ING, import growth slowed to 11.8% year-on-year compared to July's 16% growth. The main decline in imports was seen in categories such as mineral products (-6.9%), vehicles (-5%), and textiles (-4.2%), while imports of animal and vegetable products fell by 11.7% and 16.1% respectively. The general fall in prices for these categories was the main reason for the decline. However, other categories showed resilience. Electrical equipment and machinery imports showed a growth of 20.1%, driven by imports of electronic parts. This resulted in a trade surplus, which more than doubled to $11.5 billion compared to $4.8 billion in July, also beating projections of $11.2 billion.
Taiwan's August export growth was more substantial than expected, positively impacting the country's third-quarter GDP.
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