Apple Product Launch Benefits Taiwanese Manufacturers
Taiwan’s exports grew faster in July, as electronics brands increased production ahead of new releases and the global economic recovery continued.
Economists expect the next-generation iPhones and other hand-held devices slated for release in the second half of the year will continue to boost overseas sales of Taiwanese component manufacturers. However there is concern that Taiwan exports could fall back to very low growth when the releases are over toward the end of this year.
Taiwan shipped $26.77 billion of goods abroad in July. That was a 5.8% increase from the same month last year and a sharp improvement from a 1.2% rise in June.
Exports of microprocessors—a major export item—totaled $6.22 billion in July, the highest monthly record.
Taiwan’s export orders, an early indicator of actual exports, were at their strongest in 17 months in June. Industrial production in June was up 8.6% on an annual basis, led by double-digit gains in semiconductor output.
Electronic manufacturers in Taiwan are supplying components such as microprocessors and camera lenses to tech behemoths including Apple Inc. The Wall Street Journal reported earlier this week that the Cupertino, Calif., company plans to launch the next-generation iPhones early next month, and final assembling of the phones will likely kick off soon. The island’s PC makers have also seen a rise in orders in recent months, as companies are upgrading their hardware after Microsoft Corp. phased out its old operating system.
“Exports to the major markets have warmed up in the second quarter…this trend will likely continue on the ongoing recovery in both China and the U.S. in the second half of the year,” ANZ Research said in a research report.
Taiwan’s overall exports grew 2.5% in the first seven months, better than the 1.4% growth in the entire 2013. The government expected exports to grow 3.1% this year, and the broader economy 2.98%—the highest in three years. Export growth remains below the double-digit percentage expansion often seen in the 1990s and early 2000s.
But Marcella Chow, an economist at Bank of America-Merrill Lynch, said: “The launch of iPhones won’t likely have a lasting impact on exports. The boost will likely be between August and November at most.”
The upcoming rollout of Apple’s new iPhones is already boosting some Asian economies and supplier sales. The Wall Street Journal’s Yun-Hee Kim talks to Eva Dou about the Apple effect.
Imports into Taiwan rose 9.5% to $24.16 billion in July, faster than June’s 7.5% rise. Improving external trade has also led manufacturers to expand production lines, increase staffing and import more raw materials and machines, economists say.
Shipments to China were up 3.2% in July, improving from a 1.1% rise in June. Exports to the U.S. gained 2.4%, much slower than a 11.8% rise in June.