Taiwan: AI boom sustains trade surplus – Commerzbank

Commerzbank economists report Taiwan's August trade surplus reached a record USD22.3 billion, primarily fueled by strong exports related to artificial intelligence. Electronics and semiconductor shipments experienced a significant surge, driving overall exports and imports. Authorities anticipate this export momentum to persist throughout the second half of the year, although the economy remains dependent on AI-driven electronics, making growth vulnerable to any slowdown in global AI investment.

The August trade surplus exceeded expectations, surpassing the Bloomberg consensus of USD19.9 billion and increasing to USD22.3 billion, up from USD17.2 billion in July. Year-to-date, the surplus has grown by 57.6% to USD136.9 billion, supported by robust AI-related export growth.

Exports saw a 41.0% year-over-year increase (Bloomberg consensus: 34.7%), primarily driven by high demand for advanced semiconductors and other AI-related products, along with higher memory-chip prices. This marked a record monthly high of USD82.4 billion. Growth in other sectors was more modest. Plastic exports declined by 1.1% year-over-year, compared to a 3.8% increase in July, while transport equipment exports rose by 2.3%, compared to a -0.7% decline previously.

Conversely, electronic-component exports surged by 58.0%, and information, communication, and audiovisual products grew by 41.8%, together accounting for 78.7% of total exports in the first eight months. Imports increased more than anticipated by 44.3% year-over-year (Bloomberg consensus: 40.1%), compared to a 37.4% rise in July.

Technology-related imports remained particularly strong, reflecting the robust demand for intermediate inputs and equipment associated with the AI supply chain and export production. Machinery and electrical equipment imports surged by 60.1%, compared to 55.8% previously. Moreover, imports also benefited from higher global commodity prices, with crude oil imports jumping by 55.8%, compared to 15.5% in July, due to renewed tensions in the Middle East.