Taiwan sees double-digit export boost at end of dismal 2023, buoyed by tech and AI
- Following long stretches of negative figures throughout 2023, Taiwan has posted double-digit growth in exports for December
- Favourable numbers largely attributed to increased demand for chips to power AI functions, high-level computation
Exports from Taiwan, a chief source of hi-tech gear for the global market, grew for a second straight month in December thanks to emergent demand for devices with chips built for generative artificial intelligence (AI) computations.
The design and manufacture of semiconductor chips to speed the processing of generative pre-trained transformer commands will set off a new wave of world smartphone and PC sales, analysts believe.
“Export growth improved in December, thanks to better shipments of electronics and information and communication products,” Moody’s Analytics associate economist Jeemin Bang said.
“Global semiconductor sales have picked up in recent months as AI-related chips demand has lifted billings,” Bang said. “As a leading producer of cutting-edge semiconductors, Taiwan benefits from this demand.”
The companies all have this kind of plan, and in 2024 we need to see how consumers react
Taiwan-based smartphone chip designer MediaTek has installed AI features in some of its processors, and Taiwan Semiconductor Manufacturing Company (TSMC)– the world’s largest contract chip maker – is investing in the production of these chips, said Eden Chung, semiconductor research analyst with TrendForce in Taipei.
“The companies all have this kind of plan, and in 2024 we need to see how consumers react,” Chung said.
Almost one in five PCs shipped globally this year will be “AI-capable”, with that number reaching three in five by 2027 because of new user experiences and consumer desires to replace older machines, market research firm Canalys said in a January 5 research note.
Acer, the world’s fifth-largest PC vendor by market share, said on Monday its December consolidated revenues had risen 3.5 per cent year on year. The Taiwanese firm said this month it would release PCs with processors that give AI a “boost”.
Global shipments of electronic components from Taiwan fell by just 1.2 per cent last month over December 2022, totalling US$15.86 billion according to ministry data. That fall beat an overall 2023 decline of 10.7 per cent in electronic components. Among those parts, semiconductors lost 0.8 per cent in December for a value of US$14.8 billion.
Shipments of information, communications and audiovisual products jumped nearly 95 per cent year on year to US$10.1 billion.
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Taiwan counted mainland China and Hong Kong combined as its largest export market again in December at US$13.36 billion, the ministry said. December exports to to the mainland and Hong Kong shed 6.4 per cent year on year, down from 18.1 per cent in all of 2023.
Exports to the United States from Taiwan grew 49.7 per cent last month to US$8.49 billion, and Europe took 16 per cent more shipments in December compared with the same month last year.
Globally, trade is “set to rebound modestly” this year, HSBC said in a Tuesday research report. Economists at the bank said they project world exports of goods and services to grow 1.8 per cent in 2024 and 3.4 per cent next year.
“Inventory replenishment by businesses following a wave of destocking and/or a sustained pickup in demand could help boost world trade, particularly in the second half of this year, and in turn help to buoy broader global economic prospects,” the bank’s report said.
Per the ministry in Taipei, over all of 2023 exports fell 9.8 per cent to a total of US$432.48 billion.
Analysts foresee a continued but mild expansion this year for Taiwanese exports.
Moody’s expects “recovery to proceed at a gradual pace” until at least mid-2024, Bang said.
AI-optimised hardware by itself cannot lift shipments of all tech gear, said Hu Jin-li, a professor with the Institute of Business and Management at National Yang Ming Chiao Tung University in Taipei.
“Weak” consumption in Europe and mainland China will continue to challenge exports into both markets, he added.
