Taiwan’s trade boom prompts another growth upgrade
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.
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.
How firms align with this view
Aligned with the desk view
Contrary positioning
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.
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.
Risks to this view
A sharp slowdown in global AI demand or renewed US-China trade tensions could derail Taiwan's export boom. If the CBC surprises on the dovish side by holding rates steady, TWD could weaken sharply, invalidating the bullish view.
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 inflation raise the risk of central bank tightening this year Strong export driven growth and rising inflation raise risks for CBC tightening this year Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Lynn Song Chief Economist, Greater China Taiwan's outlandish trade growth numbers continue to beat forecasts Taiwan's exports surged to 51.7% year-on-year in May, up from 39.0% YoY in April, coming in much stronger than both our expectations and those of the market. Year-to-date, exports are now up 48.7% YoY.
Impressively, all of this export growth is coming after what was already a record year for trade in 2025. Unsurprisingly, Taiwan's exports continue to be led by its major tech exports. The broader Machinery and Electrical Equipment category, which represents 84.5% of Taiwan's total exports, grew 62.7% YoY in May.
Taiwan's semiconductor exports hit a four-month high of 58.3% YoY while computer and accessory exports saw 97.8% YoY growth in May. By export destination, Taiwan's exports saw a huge surge to Singapore, up 247.5% YoY in May. Singapore's proportion of Taiwan's total exports has risen from 6.7% in 2025 to 9.7% in 2026.
This is likely focused in AI-driven semiconductor demand, where Singapore might act as a hub for re-exports across ASEAN, and perhaps to China as well. We did see in China's import data out earlier today that its imports from Singapore have also been unusually strong at 54.7% YoY on a year-to-date basis through the first five months of the year. While not matching the torrid growth of exports to Singapore, Taiwan's exports to Mainland China and Hong Kong (35.4%), the US (47.9%), and the EU (42.2%) all continued to see rapid (albeit below headline) growth in May.
Strong trade growth numbers continue to be supported by rising tech prices. Taiwan's export price index rose 18.1% YoY, while the import price index rose by 17.2% YoY in May. On the import side, Taiwan's imports rose 54.9% YoY in May, also beating forecasts and hitting a four-month high.
This brought year-to-date import growth to 37.8% YoY. A big part of the import story remains on the tech side; we saw strong semiconductor imports of 70.1% YoY in May, while semiconductor equipment imports also rose 22.4% YoY. We're also starting to clearly see the impact of higher energy prices beginning to feed through into the trade data.
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