Taiwan December exports beat forecasts on strong AI chip demand

Taipei — Taiwan’s exports rose more than expected in December, buoyed by robust demand for semiconductors from the artificial intelligence (AI) industry and continued, albeit weaker, demand from China.

Exports rose 9.2% from the same month a year ago to $43.59bn, the second-highest level, the finance ministry said on Thursday, beating a forecast of 6.5% growth in a Reuters survey. The increase, though slightly below November’s gain of 9.7%, marked a 14th straight monthly rise.

The ministry said the growth outlook into the first quarter was stable because of demand for semiconductors for AI, but added that January exports could fall between 1% and 4% year on year because of the Chinese lunar new year holiday.

People in China usually head to their hometowns for the festival, which starts on January 29 this year, and many businesses close for an extended period.

China is Taiwan’s biggest trading partner.

The fourth quarter is traditionally strong for Taiwan’s exports due to the peak end-of-year shopping season in the US and Europe.

Taiwan firms such as TSMC, the world’s biggest contract chipmaker, are major suppliers to Apple, Nvidia and other tech giants.

In December, exports to the US rose 16% to $9.845bn, adding to a 10.6% gain in November.

Exports to China rose 3.6%, slowing after a jump of 9.5% the previous month. China’s $18-trillion economy is struggling to recover from the pandemic and manufacturing activity barely grew in December, according to official data.

Taiwan’s total exports of electronic components rose 8.6% in December to $17.21bn, with semiconductor exports up 9.4%. Imports rose 30.4% to $37.51bn, faster than economists’ forecasts for a gain of 15.1%.

Reuters