TAIPEI: Taiwan's export orders fell for a third straight month in June on weak demand from China and other emerging markets in a worrying sign for global technology demand. Last year, strong demand for Apple's iPhone helped power Taiwan's exports, a factor that is missing now.
June exports contracted 5.8 percent, roughly in line with a median 5.62 percent fall forecast by economists in a Reuters poll. In May, exports dropped 5.9 percent, the fastest pace in more than two years.
Orders from Taiwan's two biggest export markets were mixed; with China down 11.5 percent from a year earlier while those from the United States rose 5.8 percent, the economics ministry said on Monday.
"The increase was mainly due to more orders of handheld devices by global brands," the ministry said in a statement. "However, demand for PC and mid- to low-end handheld devices was weak, offsetting order momentum." The ministry said the value of overall orders in July was likely to improve over June, and some economists cited recovering US and European economies as positive signs for Taiwan orders.
"We see orders hitting bottom in June-July, recovering slowly into the rest of this year," said analyst Wang Cheng-hung of Yuanta Securities Investment Advisory, Taipei.
Orders from Europe and Japan both declined, down 7.7 percent and 6.0 percent, respectively, the ministry said. Of the seven major sectors, only information and telecommunications posted gains.
Electronics, precision, chemical and three others all came in negative territory.
Taiwan's export orders are a leading indicator of demand for Asia's exports and for hi-tech gadgets, and typically lead actual exports by two to three months. Orders for Taiwan, known as a big production base for electronics, are seen as a key reference for the global electronics sector.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, last week gave investors a downbeat third-quarter outlook estimating July-September revenue to rise just 2.2 percent from the second quarter.
US chipmaker and peer Intel also cut its 2015 capex forecast a second time by $1 billion to $7.7 billion.
Taiwan is bracing for a fall in exports this year, the first since 2009.
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