Taiwan semiconductor sector to profit from U.S.-China trade war

Global electronics companies could redirect orders to Taiwan: MOEA

Semiconductor exhibition

Semiconductor exhibition (AP photo)

TAIPEI (Taiwan News) – Taiwan’s semiconductor sector should not be afraid of the next round in the trade war between the United States and China later this month as it will profit from the relocation of orders, Economics Minister Shen Jong-chin (沈榮津) said Thursday.

A new round of punitive tariffs leveled by the Trump Administration is expected to come into force on August 23, stoking fears about the sharpening of a trade war between the two major powers.

However, Shen said that since the semiconductor industry in Taiwan is just about the strongest in the world, it should profit from orders being relocated away from China by the world’s major electronics companies, the Central News Agency reported.

Major Taiwanese chipmakers had not directed a large proportion of their investments to China, so they should not be overly worried, according to the minister. Taiwan Semiconductor Manufacturing Co. (TSMC) for example, produced for a value of US$700 million (NT$21.4 billion) in China, but that amounted only to 0.9 percent of its total production, according to Ministry of Economic Affairs data.

The U.S. tariffs were likely to affect giants like Samsung and Intel, who might turn to Taiwan instead, CNA reported.

Shen described his ministry’s major task in the face of trade wars as taking care of basics, that is to say continuing to improve the investment environment.