Shrinking global tech demand drags down Taiwan’s economy

The rollout of 5G in many countries along with newer upgraded models of smartphones could spur exports orders for the island nation.

On Monday, data from Taiwan’s Ministry of Economic Affairs showed, its export orders fell for the fifth straight month in March, at a pace that was much much sharper than expected.

Taiwan’s manufacturers are struggling to cope with a drop in demand from technology from the global economy.

In March, export orders dropped by 9% from a year earlier to $38.59 billion, showed the data from Ministry of Economic Affairs.

For the January-March period, export orders slid by 8.4% – its highest annual drop for a first quarter since 2009, when they had tumbled by 30%, said the ministry.

Exports orders for March fell by almost twice the 5.45% forecast although the pace was less than that of February’s 10.9%, which marked its sharpest fall in three years.

Manufacturers in Taiwan, an export-driven economy, are reeling from slowing demand from tech heavyweights such as Apple Inc and Qualcomm. The continued drop in orders suggests that the global electronic industry could remain soft in the coming months.

As per a statement from the ministry, shrinking orders in March can also be linked to business caution in China, which is feeling the heat of trade action.

Nevertheless, it feels, the upcoming launch of new smartphone models along with demand for new technologies, including 5G and artificial intelligence, could support a rebound of orders for electronics in coming months.

Although 5G networks are being installed in South Korea, China, U.S. and in other countries this year, their usage will become more widespread only after 2020.

In the United States, the telecommunications industry is expected to sink in $275 billion over seven years, according to estimates from Accenture.

As per Carl Liu, an analyst at KGI Securities, Taiwan export orders “are unlikely to return to growth until in June, thanks to re-stocking of electronics ahead of the peak season in the third quarter”.

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Strategy

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