Taiwan's server exports to the US surged 400% from a year ago in the second quarter of 2019 thanks to Taiwan-based makers relocating production back to Taiwan from China in response to the US-China trade tensions, according to a report by Taiwan's Ministry of Economic Affairs (MOEA).
The report noted China's GDP growth in the second quarter of 2019 hit a new quarterly low in 27 years. In the first half of 2019, South Korea saw its overall exports drop 8.5% on year, Japan down 6%, Singapore down 4.7% and Taiwan down 3.4%.
China's PC electronics and optical industries have both been hit hard by the US-Chian trade disputes, prompting Taiwan companies in these industries to shift parts of their production back home, the report said.
Taiwan's production value started to rise in the second half of 2018 and grew 16.5% on year in the first half of 2019 in US dollar. Of the amount, network communication equipment orders from the US increased 45.8% on year, while server orders rose by up to 400% on year.
Since network communication equipment and servers are both subject to the US new tariffs on China-imported products, Taiwan's related exports to the US went up significantly by 90.1% on year in the first half, an equivalent to a growth by US$2.67 billion.
The report also showed that the ratio of the US exports to China slipped from 7.8% during January-May 2018 to 6.3% during the same period in 2019, while the ratio of its imports from China also fell from 20.1% to 17.5%.
Of the 6,842 China-imported items subject to the US tariffs, 25.7% were PC electronics and optical-related products, 13.2% power equipment and 10% machine equipment.
Of the investments returning to Taiwan, 36.3% were from the electronics component industry and 22% the PC electronics and optical industries, followed by power equipment and machine equipment, the report showed.
Taiwan server players are moving production back to Taiwan
Photo: Digitimes file photo
Article translated by Joseph Tsai
