TAIPEI: Taiwan's export orders rose for the 12th straight month in July, fueled by solid demand for smartphones and other tech gadgets as global retailers and their suppliers prepare for peak-year end shopping season.

Solid demand for Asia's exports, particularly electronics, helped drive stronger-than-expected economic expansion across most of the region in the second quarter, and has prompted Taiwan to raise its 2017 growth forecast to the strongest in years.

Taiwan last week bumped up its forecast for this year to 2.11 percent from 2.05 percent seen in May, and predicted further gains in 2018.

July export orders jumped 10.5 percent year-on-year, government data showed on Monday.

While that was slightly slower than the 12.25 percent growth analysts had expected, and the 13 percent seen in June, the economics ministry predicted export orders by value would pick up again in August as retailers start stocking up their warehouses and shelves.

"Upcoming launches of handheld devices should strongly boost orders for information and telecommunications, electronics products and optical equipment," the ministry said.

"Orders for traditional products continue to shine thanks to the global economic recovery combined with the start of the seasonally (strong) period," it added.

July export orders totalled $38.72 billion. Demand for all major products grew on-year, with orders for information and telecommunications products as well as basic metal and optical equipment among others expanding by double digits.

Taiwan's export orders are a leading indicator of demand for Asia's exports and for hi-tech gadgets like Apple's new iPhone 8, which is expected to be launched in September.

That is likely to keep manufacturers busy well into the fourth quarter, as orders typically lead actual shipments by two to three months.

Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker and a major Apple supplier, told investors in July its third-quarter revenue would rise after a traditionally weak second quarter.

Apple Inc. recently delivered surprisingly strong fiscal third-quarter earnings and signaled that its coming 10th-anniversary phone lineup was on schedule, boosting expectations of strong earnings for its suppliers in Taiwan and across the world.

SLOWING DOWN?

To be sure, some analysts believe Asia's broader export resurgence this year may have peaked in the second quarter. But the global electronics rally has run longer and hotter than many market watchers had predicted.

"Pervasive demand for electronics means that our markets are getting larger and substantially less cyclical," Gary Dickerson, chief of Applied Materials Inc, said last week. The company, the world's largest supplier of tools used to make semiconductors, reported better-than-expected quarterly profits.

Risks to the outlook include softer year-end demand for electronics than expected. Many analysts also believe China's economic growth will fade slightly in coming months, while the United States has stepped up its protectionist rhetoric.

"We think exports are losing momentum in the second half due to slower consumer electronic demand. July export order data will shed light on the export outlook," ING said in a research note published before the latest Taiwan data.

Export orders from China and the United States - Taiwan's two biggest markets - did grow at a slower pace in July, rising by 10.7 percent and 7.7 percent, from 17.3 percent and 13.1 percent, respectively, in June.

A private business activity survey for July, however, suggested Taiwan's manufacturers were cranking up production to rebuild inventories of both raw materials and finished goods to meet expected strong client demand in the second half.