J.P. Morgan Highlights Positive Taiwan Export Outlook
The US bank highlights Taiwan's export orders beat as boding well for the export outlook (data out late yesterday). Structural AI related demand is seen as supporting the outlook, see below for more details.
J.P. Morgan: "Taiwan’s April export orders came in notably above expectations. Seasonally-adjusted, we estimate that export orders rose 4.9% m/m, sa in April, with strong sequential trend growth at 31.7% 3m/3m saar. Tech orders rose 4.5% m/m sa in April, with strong sequential trend growth at 50.1% 3m/3m saar, reflecting broad-based upturn in orders for electronics products as well information and communication products. Non-tech orders showed modest growth at 4.2% 3m/3m saar in April, with modest growth trend in machinery orders (3.9% 3m/3m saar).
Going forward, our baseline forecasts look for a steady uptrend in Taiwan’s tech exports in the coming quarters, including a structural boost of AI-related products and HPC-related demand, with a gradual recovery in other tech demand areas, including PC, smartphone, and other consumer-related tech demand going into 2H24, while the global tech sector’s de-stocking pressure begins to ease.
From a global perspective, our global team continues to perceive healthy fundamentals for goods demand going ahead, with resilient corporate income gains bolstering business spending and global capex, as well as a solid labor income trend, hinting at a decent global goods demand growth outlook. Overall, external demand conditions remain broadly constructive for Taiwan’s export sector activity going forward."