Taiwan October exports drop unexpectedly but recovery seen ahead

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By Sarah Wu

TAIPEI, Nov 7 (Reuters) Taiwan’s exports fell unexpectedly in October on weak global demand for the island’s technology products, as sluggish sales to China offset strong shipments to the United States ahead of the year-end holiday shopping season.

October exports fell 4.5% in value from a year earlier to $38.11 billion, the finance ministry said on Tuesday, missing analysts’ forecasts in a Reuters poll for a 1.05% expansion.

Shipments also worsened on the 3.4% expansion in September.

For November, the ministry predicted exports would be between +3% to +6%.

Strong technology driven by artificial intelligence (AI) was not enough to offset sluggish global demand for consumer electronics, the ministry said, adding that a high base from a year earlier also contributed to the decline in exports.

The ministry said, however, Taiwan’s exports should “stabilize” in the near future thanks to new technologies including AI and new product launches by international vendors.

“The dawn is breaking,” ministry official Beatrice Tsai told reporters, describing the exports outlook for this quarter.

Taiwan’s export-dependent economy grew faster than expected in the third quarterhelped by domestic consumption, though exports remained weak as flagging global demand hit sales of the island’s hi-tech products.

The ministry expected exports this year to drop about 10%, the biggest dip in eight years.

In October, Taiwan’s total shipments of electronic components fell 7.4% from the year before to $15.64 billion, with semiconductor exports down 6.5%.

Taiwanese firms such as TSMC 2330.TW, TSM.Nthe world’s largest contract chipmaker, are major suppliers to Apple Inc AAPL.ONvidia NVDA.O and other global tech giants, while providing chips for auto companies and lower-end consumer goods.

Taiwan’s exports to China fell 3.6% in October from a year earlier to $14.18 billion, after the prior month’s drop of 8.8%. The Chinese economy is beginning to stabilize after a rocky post-COVID recovery.

Taiwan’s exports to the United States rose 12.1% to a record high for any month, but slowing from 17.7% growth in September.

October imports, often seen as a leading indicator of re-exports of finished products, dropped 12.3% to $32.34 billion. That compared with economists’ forecasts for a 14.55% fall.

(Reporting by Sarah Wu and Yimou Lee; Editing by Bernadette Baum)

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