Taiwan’s trade surplus falls short of lofty expectations in June
The desk interprets Taiwan's trading position as weaker than anticipated, indicating potential moderation in growth momentum. The June trade surplus reached $12.2 billion, significantly lower than market forecasts, driven by stronger-than-expected imports and slower export growth, particularly in key sectors such as semiconductors and computers. Per the full note from ING, export growth eased to 40.3% year-on-year, down from 51.7% in May, with a notable decline in semiconductor export growth to 33.4%. In light of this, market participants should brace for potential volatility as the implications of these trade figures unfold within the greater context of Taiwan's economic outlook.
What the desk is arguing
The desk frames Taiwan's trade dynamics as indicative of a potential cooling in export-driven growth, as the June surplus fell below expectations. Per the note from ING, the trade surplus was reported at $12.2 billion, a figure well below market forecasts amid softer export performance in critical sectors. This development suggests that while growth remains robust, challenges are emerging that may temper future expansion.
In particular, semiconductor exports, which are vital to Taiwan’s economy, have seen a startling drop, accelerating at just 33.4% year-on-year compared to previous months. This trend underscores the underlying volatility in an otherwise strong export environment and contributes to worries about a slowdown in the upcoming quarters.
Where it sits in our coverage
As the economic picture comes into sharper focus, our consensus target for TWD reflects a mixed sentiment among firms. Notable targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This view appears more cautious compared to jpmorgan, which predicts stronger TWD performance, while bofa suggests a bearish outlook, thus offering a spread that reflects the uncertainty in trading dynamics.
How other firms see it
Aligned firms such as jpmorgan consider the potential for a rebound, while the bearish perspective of bofa raises caution regarding Taiwan's export resilience. This split in outlook reflects broader concerns about emerging market dynamics and trade balances.
Key related currencies include the USD/TWD, which may reflect how shifts in trade balance impact Taiwan's dollar strength against the USD. Watch for signals surrounding global semiconductor demand, which may further influence TWD’s trajectory.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Taiwan's trade surplus for June hits $12.2 billion, below expectations.
- 02Export growth slows significantly to 40.3%, highlighting potential economic moderation.
- 03Semiconductor export growth dips sharply, signaling market volatility.
- 04The divergence in firm outlook reflects uncertainty in Taiwan's economic recovery.
Market implications
Trading positions may need adjustment as TWD reacts to these figures; watch USD/TWD around the 1.075 level for fluctuations. The deceleration in exports could lead to reassessments by market participants ahead of any major policy announcements.
Risks to this view
A reversal in trade momentum could stem from unexpected strength in global semiconductor demand or a sharp rebound in export activity, which would likely invalidate the cautious stance on the TWD.
Older quick take Quick take 10:25 Taiwan Trade Taiwan’s trade surplus falls short of lofty expectations in June Both exports and imports continued to grow at an outlandish pace, but in June, imports beat forecasts while exports slowed, leading to a softer-than-expected trade surplus. Second-quarter growth is likely to moderate after a very strong start to the year, but Taiwan's 2026 growth outlook should remain solidly on track Better-than-expected imports combined with lower-than-expected export growth resulted in a June trade surplus of $12.2bn, well below market forecasts Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Lynn Song Chief Economist, Greater China US$12.2bn Taiwan's June trade surplus A 12-month low Lower than expected Taiwan's export growth moderated in June Taiwan's export growth slowed to 40.3% year-on-year in June, down from 51.7% YoY in May. This came in weaker than forecasts (market: 49.9%, ING: 46.9%), though this level obviously still represents very strong growth.
By product, we saw quite a sharp drop in semiconductor exports on the month, slowing to 33.4% YoY from 58.3% YoY. This category has been rather choppy so far this year, but June was the biggest underperformance for semiconductors relative to headline export growth in 2026. We also saw the other key pillar of exports, computer and accessory exports, slow to 77.0% YoY from 97.8% YoY.
Overall, the leading electronics and IT products category, which accounts for roughly 80% of Taiwan's total exports, slowed to 52.9% YoY from 66.3% YoY. By export destination, Taiwan's export growth generally slowed across the board, with exports to the US (34.8%), China and Hong Kong (22.2%), ASEAN (47.1%), Japan (17.7%), and South Korea (31.8%) all down significantly from May's data. A major exception was exports to the EU (48.4%), which accelerated in June.
Taiwan's export price index snapped a nine-month streak of upward momentum, cooling slightly to 18.8% YoY, down from 19.9% YoY in May. Nonetheless, this growth level continues to show Taiwan's exporters are benefiting from higher selling prices amid the AI boom. Through the first half of the year, exports have grown 47.1% YoY to $416.7bn, which is set to be a major contributor to Taiwan's GDP growth in the first half.
The base effect grows more challenging in the months to follow, but export demand remains very strong. Import growth surprises on the upside amid strong chips and oil demand Taiwan's import growth was fairly stable in June, edging down to 51.8% YoY from 54.9% YoY, coming in stronger than market expectations (Market: 48.0%, ING: 48.0%). In terms of key import categories, Taiwan's strongest imports were tech-related items such as semiconductor equipment (58.9%) and semiconductors (76.6%), along with another month of elevated crude oil imports (67.7%) amid high prices.
The prices paid for imports tend to lag the spot prices for crude oil, so the price pullback in June might take a month or two to be reflected in the import data. Reflecting these categories, Taiwan saw very strong import growth from ASEAN (101.1%), South Korea (81.4%), the US (47.9%) and Japan (37.8%). In contrast, imports from Europe (2.1%) were the key laggard on the month.
Year-to-date, Taiwan's imports surged 40.3% YoY, rising to $319.2bn. June trade surplus disappoints, but net external demand remains a big driver of growth In net, the better-than-expected imports combined with lower-than-expected export growth resulted in a June trade surplus of $12.2bn, coming in well short of market forecasts (market: $19.0bn, ING: $17.3bn). While the June data was on the disappointing side, it's worth noting that expectations have been repeatedly revised up for some time.
Zooming out, Taiwan has seen a trade surplus of $97.4bn in the first half of the year, up 74.8% YoY from the first half of 2025. This will once again be a major contributor to GDP growth when it comes out at the end of the month. We are looking for GDP growth to slow to around 12.1% YoY, down from the 14.55% YoY growth we saw in 1Q26, but still a very impressive reading.
Taiwan's 2026 annual growth still has a realistic chance to hit double-digit growth this year, which would be the first year this has happened since 2010; we're looking for 10.3% YoY growth in 2026. Taiwan Imports External trade Exports Emerging markets Asia Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.
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