Taiwan’s trade boom prompts another growth upgrade
At a Glance
Taiwan's May trade data smashed expectations with exports surging 51.7% YoY, driven by AI-related semiconductor demand and a record year for trade in 2025. The strong export performance and rising inflation increase the risk of central bank tightening by the CBC later this year. Our internal consensus sees USD/TWD trending lower, but the tightening risk may cap further TWD strength. Calendar catalysts are sparse, but the next CBC decision in July will be key.
Key Takeaways
- 01Taiwan's exports surged 51.7% YoY in May, led by AI semiconductor demand.
- 02Surging exports and inflation raise risk of CBC tightening later this year.
- 03The Singapore re-export channel is booming, up 247.5% YoY.
- 04Internal consensus USD/TWD targets range 30.5-31.5; ING leans bullish TWD.
Full Analysis
What the desk is arguing
ING argues that Taiwan's sustained trade boom, with exports surging 51.7% YoY in May (vs. 39.0% in April), is now prompting another growth upgrade for the economy. The desk frames the data as evidence that demand for Taiwanese tech exports remains exceptionally strong, particularly in AI-driven semiconductors and computer accessories, which saw 97.8% YoY growth. The surge is broad-based by destination, with a notable spike to Singapore (up 247.5% YoY) likely reflecting re-exports to ASEAN and China.
The supporting evidence is the overheated trade data: year-to-date exports are up 48.7% YoY, and all categories show robust volume growth. The desk flags that strong export-driven growth and rising inflation raise the risk of central bank tightening by the CBC this year, which would be a hawkish pivot from its current accommodative stance.
The alternative read would be that the torrid Singapore numbers are a one-off statistical fluke. However, ING notes that China's own import data from Singapore is also unusually strong (54.7% YTD), suggesting durable demand through that channel.
Where it sits in our coverage
Internal consensus on USD/TWD is for a modest decline, with targets ranging from 30.5 to 31.5 by year-end. Domestic banks are broadly aligned with ING's bullish Taiwan view, while some foreign banks see more upside for the USD on trade tensions.
This view aligns with jpmorgan (target 30.8, Dec-26) and morganstanley (target 30.5, Dec-26), both of which see TWD strengthening on export momentum. It diverges from goldman (target 31.5, Dec-26), which is at the upper bound of the spread and more cautious on tightening risks. - jpmorgan: 30.8 (Dec-26) - morganstanley: 30.5 (Dec-26) - goldman: 31.5 (Dec-26)
How other firms see it
JPMorgan and MorganStanley are aligned with ING's bullish Taiwan export view, expecting continued TWD appreciation. Goldman is contrary, warning that CBC tightening could backfire and weaken the currency.
Related pairs: USD/TWD and CNY/TWD are the most direct expressions of this theme, as Taiwan's tech exports are highly correlated with global tech demand and China's import cycle. The KRW also often tracks TWD in the Asian export complex.
What the calendar says
No high-impact events are scheduled in the next 30 days for Taiwan. The next key catalyst will be the CBC rate decision on July 25, which will test ING's thesis on tightening risk.
Market Implications
Watch USD/TWD for a break below 31.00 on sustained export momentum; the July CBC decision will be the next major risk event. Tightening expectations could cap TWD gains initially.
From the original
Older quick take Quick take 11:07 Taiwan Trade Taiwan’s trade boom prompts another growth upgrade Both exports and imports well exceeded expectations again in May, surging over 50% year-on-year as rising prices support strong volume growth. Strong export-driven growth and rising
Related speeches
4 itemsTaiwan’s exports see a rare miss in April
Lead — Taiwan's export growth decelerated to 39.0% year-on-year in April, falling short of market expectations, while imports also disappointed at 29.2% YoY. Per the full note from ing-think, this slowdown raises questions about the sustainability of Taiwan's export-driven recovery amidst rising global oil prices. The desk views this as a potential signal for caution among traders, especially given the lack of high-impact events on the calendar in the coming weeks.