Taiwan's export orders climbed 8.9% in April

Here's what boosted this growth.

According to DBS, Taiwan's export orders rose more than expected by 8.9% YoY in April, the fastest rate since Jan13 and higher than March’s 5.9%. Semiconductors and other electronics components led the rise, accelerating to 16.6% YoY from 10.1%.

Here's more:

Taiwan’s electronics orders have been highly influenced by the product cycles of smartphones and other mobile devices in the global markets over the last two years. A strong upswing in electronics orders was witnessed in the fourth quarter in both 2012 and 2013, followed by a sharp pullback in the subsequent quarter. 

Given that new smartphone products will be released in the second half of this year, electronics demand is likely to re-enter a cyclical upturn in the coming quarters.Within the category of high-tech products, orders for flat panels and other precision instruments continued to contract sharply in April (-13.3%, vs.-3.6% in March).

Demand for the Taiwanese-brand information & communication products like computers and mobile phones still appeared tepid (6.9% vs. 8.6%). The long-term competitiveness of Taiwan’s high tech industry remains of concern. 

As a result of the technological upgrade in China over recent years, Chinese firms have expanded the production lines for the high generation flat panel displays and therefore, reduced imports demand from the Taiwanese suppliers. 

In order to maintain the competitiveness edge, Taiwan will need to promote further technology advancement and importantly, lower the reliance on the contract manufacturing model and focus more on product development and brand building.