Taiwan reports 13th straight month of export order decline, world economy blamed

For the 13th month in a row, Taiwan reported a drop in goods orders from overseas, even with increased need for chips used in AI applications

Protracted period of diminished purchase orders continues as world economy expected to return dismal figures in 2023, 2024

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Taiwan’s export orders continued their string of decline, although rising interest in AI applications offered some respite in terms of actual exports. Photo: Getty Images

Published: 7:11pm, 20 Oct 2023

Despite a recent surge of demand for advanced chips to run artificial intelligence (AI) applications, tech hardware hub Taiwan logged a 13th consecutive month of decline in September for overseas orders – a prolonged slump caused, authorities have alleged, by economic woes elsewhere.

Orders for exports fell 15.6 per cent last month compared to September 2022, the Ministry of Economic Affairs announced, for a total value of US$51.4 billion.

“Slackened external demand, poor order visibility amidst global economic uncertainty and inventory destocking along the supply chain continue to weigh on export orders to Taiwan,” said George Xu, director of Asia-Pacific sovereign ratings with Fitch Ratings.

Commitments from offshore plummeted without the brisk purchases of PCs and smartphones for telework and home study made during the pandemic. The end of that cycle left many of Taiwan’s tech firms, including its signature chip makers, with excess inventory in late 2022 and early 2023.

Hi-tech comprises about 30 per cent of Taiwan’s US$820 billion-plus economy, and the island supplies three out of five of the world’s semiconductor chips, particularly the most advanced units.