TAIPEI (Taiwan News) — Taiwanese companies complying with US regulations in the US-China trade war will benefit from the partnership, Taiwan Institute of Economic Research (TIER) researcher Liu Pei-chen (劉佩真) said on Tuesday (Sept. 17).

Liu said the US and Taiwan’s semiconductor industry ecosystems are complementary, per CNA. As Taiwan Semiconductor Manufacturing Company's (TSMC) US plants continue to advance, they help the US achieve its vision of increasing local semiconductor manufacturing, the researcher said.

Liu added that since the US’ Huawei ban in 2020, China’s access to high-end technology has been tightened. Although Taiwan still exports IC design and mature process wafer foundry products to China, these are mainly used in consumer electronics.

Regarding the US presidential election, Liu said if former President Donald Trump is elected, there will be greater uncertainties for Taiwan’s semiconductor supply chain. Trump’s proposal to raise tariffs could hinder the recent efforts of the US to unite allies against China, as it also affects semiconductor industries in South Korea and Taiwan, she explained.

According to the US Department of Commerce’s Foreign Direct Product Rule, manufacturers using US equipment and technology are subject to regulations. Liu stressed that Taiwanese companies strictly adhere to US export controls without violating bans or exporting high-end chips to China. 

To comply with such export controls, the Ministry of Economic Affairs amended its trade laws, increasing penalties for violations from NT$300,000 (US$9,400) to NT$3 million. To address the risk of transshipment to third countries, the International Trade Administration this year required companies exporting to high-risk transshipment regions to pledge not to ship to Russia.