Taiwan’s economy is booming as chip demand soars

TSMC is Taiwan’s biggest chip maker. Image: TSMC

Taiwan’s exports started the second half of 2021 as it ended the first, growing at an unrelenting pace fuelled by overseas demand for computer chips and electronic components, reflecting strengthening optimism the post-Covid global recovery is taking hold.

Taiwan’s overseas shipments rose 34.7% in July from a year earlier to US$38-billion, according to a statement on Monday from Taiwan’s ministry of finance. That was the highest for any month in data back to 1981. Total imports rose 41% to $32.1-billion, leaving a $5.9-billion trade surplus.

Taiwan’s economy grew faster than expected in the second quarter, mainly fuelled by a surprising growth in export demand that offset the impact of island-wide Covid-19 restrictions. GDP grew 7.5% in the second quarter from a year earlier, official data showed, beating the median estimate of 6.6%.

Taiwan’s manufacturers noted sales were rising due to stronger client demand, particularly in Europe, China and the US, as the impact of Covid-19 weakened, IHS Markit wrote in a report last week. Exports to mainland China and the US both rose by more than 20% from a year earlier in July, while shipments to Japan, South Korea and Singapore were all up more than 40%.

The government forecasts full-year economic growth at 5.6%, higher than its original estimate of 5.4%, after seeing better-than-expected results.  — Reported by Betty Hou, (c) 2021 Bloomberg LP

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