J.P. Morgan On Taiwan Trade

The US bank expects the tech export trend to improve further, despite the pull back in April. It also highlights the strong growth to the US in terms of shipments, relative to China. See below for more details.

• J.P. Morgan: "Overall tech exports fell 3.8% m/m sa in April, after the jump of 9.1% m/ sa in March, with the sequential trend rising 12.1% 3m/3m saar. Further breakdown highlights strong underlying expansion trend in exports of information and communication products (up 137.1% 3m/3m saar), reflecting strong growth in exports of AI-related products.
• Non-tech exports fell 7.3% m/m sa in April, with the sequential trend falling 14.5% 3m/3m saar. Machinery exports softened in April, falling 2.9% m/m sa (or down 17.2% 3m/3m saar).
• Breakdown by export destination highlights ongoing outperformance in exports to the US (+76.5% 3m/3m saar), along with solid growth in exports to the ASEAN region (+31.7% 3m/3m saar), while exports to China/ HKSAR continue to underperform (-23.9% 3m/3m saar).
• Going forward, we look for further steady upward trend in Taiwan’s tech exports in the coming quarters, including a structural boost of AI-related products and HPC-related demand, while the tech sector’s de-stocking pressure begins to ease.
• The recent sequential upturn in Taiwan’s capital goods imports is encouraging, suggesting a tentative recovery in the domestic capex trend, likely reflecting Taiwan manufacturers’ improving sentiment on the export sector outlook."