The US has praised Taiwan's trade and investment opening to China as a move toward the peace and security of East Asia, while analysts say the move will help spur more US investments in Taiwan.
This was in reaction to President Chen Shui-bian's (
"We welcome the decision," the US State Department said. "We believe improving cross-strait economic ties serves the interest of both Taiwan and China and is conducive to peace and security in the region."
US-based companies may be more likely to invest in Taiwan following the move.
The new policy "makes Taiwan a more attractive destination for corporate capital that is interested in having operations which are well integrated with operations in China," said Michael Aller, a researcher at the Brookings Institution in Washington.
"Dell Computer and some other major Western investors have long complained about problems in going between Taiwan and China, and have cited the `go-slow, be patient' policy and the US$50 million ceiling as reasons for not investing in Taiwan. [The new policy] will help the business climate," Aller said.
High-tech companies, however, are likely to hold back until the US economy improves.
"Under present circumstances, companies may not jump in because they are fairly risk-averse at the present moment," Aller said.
He said the growth in investment across the Taiwan Strait is likely to be "significant," especially among low-end high-tech companies that are now investing in third countries such as Malaysia and Singapore.
He also said that the policy will help shed light on the true level of cross-strait trade and investment during Taiwan's 50-year-old policy of heavily restricting direct business links with China.
"I think it will help both sides realize the exact extent of the trade they have now. A lot of this trade and investment has been going through tax havens," Aller said.
The decision to allow the tax-free transfer of funds from offshore banks may also lead to the repatriation of substantial funds to Taiwan.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San