Demand for iPhones see Taiwan export orders take off in October

HONG KONG — For a single product, the iPhone plays a leading role in Taiwan’s export orders, helping push the key economic indicator of the country to a record $44.9 billion in October on demand for the smartphone and other consumer electronics.

The 13.4 percent year-over-year gain in Oct. orders for exports was the ninth straight month of growth, the island nation’s economic affairs ministry announced. Export orders from the U.S. hit a record $12.43 billion in Oct., rising 17.4 percent year-over-year while those received from Europe were up just shy of 30 percent to a record $9.52 billion.

Mainland China and Hong Kong, Taiwan’s other major overseas markets, saw orders rising 3 percent year-over-year to $9.98 billion, although it was a 4 percent drop on Sept. orders.

Taiwan’s orders for mobile devices rose 21 percent compared to the same month last year because of solid sales in mobile phones. Although the ministry did not identify any brands, most of the world’s iPhones are manufactured by Hon Hai Precision Instruments, parent of Foxconn, and Pegatron Corp., both Taiwan companies.

Hon Hai is the world’s largest consumer electronic maker and assembles products for many leading brands through its China factories. The Zhengzhou factory assembles two-thirds of all iPhones produced.

Apple is notoriously tight-lipped about its products but last month claimed to have sold 39.3 million iPhones in the three months ending September 27, up 16 percent from the same period a year earlier. Even though the products are assembled in China, the orders are received through the Taiwan factories on the island, and semiconductors used in the product are sourced from local manufacturers such as Taiwan Semiconductor Manufacturing Co., the world’s largest maker of the chips.

In fact, TSMC reported a revenue growth of 56 percent in Oct. compared to the same month last year, with year-to-date revenues up 23 percent over 2013.

Evidence of the growing consumer electronics business can be seen in semiconductor sales that are 72 percent connected to air freight volume, investment firm BB&T said a recent report. The Semiconductor Industry Association (SIA) said worldwide sales of semiconductors reached $87 billion during the third quarter, an increase of 5.7 percent over the previous quarter and a jump of 8 percent compared to the third quarter of 2013.

Third quarter sales outperformed the latest World Semiconductor Trade Statistics (WSTS) industry forecast.

Falan Yinug, SIA director, industry statistics and economic policy said that while the news of quarterly sales growth was not unexpected — the World Semiconductor Trade Statistics (WSTS) program had forecast quarter-over-quarter sales growth of 4.4. percent — the 5.7 percent growth rate was comfortably higher than the WSTS forecast. Also, in terms of year-over-year quarterly sales growth, the third quarter results were soundly ahead of last year’s with year-over year quarterly growth of 8 percent.

“As in previous quarters in 2014, third quarter sales growth was uniformly strong across geographical and product segments. Third quarter sales in the Americas (9.8 percent), Europe (0.9 percent), Japan (2.2 percent), and Asia Pacific (5.9 percent) grew quarter-over-quarter,” the director said in a blog filing.

“Through the first three quarters of 2014, global semiconductor sales have continuously grown to reach record levels. At this point in 2014, it is hard to envision final 2014 sales not being the highest annually on record.”

The close correlation to air freight volumes saw the amount of cargo carried increasing strongly since mid-year, and the demand is expected to extend the peak season well into Dec.

Cargo terminals have also been enjoying a purple patch. Sino-German joint venture Pudong Air Cargo Terminals Ltd. (PACTL) has been breaking monthly throughput records and in Oct. the terminal handled 153,000 tons of air freight, the most ever and a year-over-year growth of 17.1 percent.

Contact Greg Knowler at and follow him on Twitter: @greg_knowler.

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