Taiwan export orders: still prefer Toyota

by SR on August 21, 2012

Taiwan total export orders, cumulative (million USD)

No change in tech, but trend in autos better

Last month I took a look at Taiwan export orders, noting that this data is released in a timely fashion and that given Taiwan’s central position in the global supply chain for many electronics products it is probably a decent barometer of tech (hardware) industry sentiment. My conclusion this month is the same as it was last month: technology as seen through the lens of Taiwan export orders may be doing well compared to some other areas, but if you want growth, you should be looking at Japanese autos, specifically Toyota or related auto parts stocks such as Denso.

Just to underline that difference, here’s a chart showing Toyota’s global production year-to-date in 2012 (the red line), which is naturally ahead 2011 because auto output was massively disrupted last year due to the Northern Japan earthquake. Global production at Toyota is also far ahead not only of 2010 (purple) but also the very strong 2008 (green line). Note that the latest figure we have goes up to June, but I do not expect a change in trend in July. Toyota’s stock is one of the better performers this year (check these charts for a visual comparison of 30 global auto stocks) but has been surpassed by some surprising names, including those of Fiat and Renault! Blimey.

Toyota global production cumulative (million units)

A little more detail on those export bookings: July 2012 orders were released on 20 August 2012 by Taiwan’s Ministry of Economic Affairs and the headline figure for total export orders from all regions was 35.93 billion US dollars, falling 4.4% year-on-year and 1.2% month-on-month. Cumulative export orders from January to July 2012 reached 248.69 billion USD, which is down 1.4% compared to the same period in 2011. Looking at the chart at the top of this page, this is shown by the red line of cumulative orders in 2012 tracking ever so slightly below the blue line of 2011. There seems to be no major change in trend, as you can see from the red line (2012 orders) in the chart below. That is moving below the blue line of 2011, but the gap is not widening appreciably.

Taiwan export orders by year and month (million USD)

Of course, we’re not particularly interested in export orders to Taiwanese companies for, say, footwear or furniture. What we care about is technology orders, because that’s the area in which Taiwan has a global presence. So we add together orders for Information & Communication products (computers and related etc) and Electronic products (LCD, electronic parts, components etc) and call this combined data series “Technology”. It accounted for 48.7% of total export orders in July 2012, coming to 17.49 billion USD, dropping 1.8% year-on-year and falling 3.3% month-on-month. Year-to-date, export orders for technology are down just 0.5% over the same (January to July) period of 2011. So technology has done rather better than exports as a whole, which is what we should expect given Taiwan’s competitive advantage in this area. Here’s what cumulative orders look like.

Taiwan technology export orders (million USD)

Finally, we put technology orders in their historical context with this chart from 2000 to 2012. The red line shows the previous highest recorded level of orders and bookings in July were still at 93.1% of the most recent peak. Pretty good going and indicative, as I have said before, of a high degree of aggregate management agility over the years.

Taiwan technology exports, monthly vs peak (million USD)

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