The central bank yesterday said the New Taiwan dollar has been more stable than the South Korean won over the past three-and-a-half years, which has helped local exporters to reduce foreign exchange risk.
The comments came after Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Morris Chang (張忠謀) last Friday criticized government agencies, including the central bank, of not doing enough to protect local companies from the impact of strong NT dollar gains against the US dollar.
In response, the central bank said in an e-mailed statement that it was not allowed to control the foreign exchange rate and that the bank opted for the policy of keeping the local currency at a managed floating rate.
In the more than three years since Dec. 31, 2007, the NT dollar’s fluctuation rate against the greenback was 4.15 percent, much tamer than the won’s rate of 14.51 percent, the statement said.
As the won’s fluctuation rate was 3.5 times higher than that of the NT dollar, Taiwanese firms in fact enjoyed lower currency exchange risks and that boosted their export business, the central bank said.
Chang said the foreign -exchange rate could make or break a company.
He said the South Korean government had done a better job in capping the appreciation of the won against the US dollar to protect its companies over the past year.
“As Taiwanese exporters book costs in New Taiwan dollars, the foreign exchange rate can affect their competitiveness,” Chang said.
The Japanese government has also sought to ease the strains of a strong yen recently, not to mention Beijing’s tough stance on keeping the yuan steady even under massive pressure from the US, Chang said.
Taiwan and South Korea -are competitors in similar categories of export products, and the central bank said it understood the concerns of Taiwanese companies, but said it could not manipulate the NT dollar because it had adopted a “managed floating” mechanism.
Taiwan and South Korea are long-time rivals in the technology field.
South Korean bigwigs such as Samsung Electronics Co and LG Electronics Inc manufacture products from handsets and LCD panels to chips and computers, products that are also manufactured by Taiwanese firms, including TSMC, HTC Corp (宏達電) and Acer Inc (宏碁).
Although a stronger NT dollar can impact companies’ profitability, on the other hand, Taiwan enjoys imported goods at a cheaper rate and that helps stabilize prices of domestic consumables, the statement said.
Taiwan’s Consumer Price Index (CPI) expanded 1.43 percent during the January to July period, compared to South Korea’s 4.4 percent, according to central bank statistics.
Taiwan’s CPI climbed 0.96 percent last year, while South Korea’s advanced 2.93 percent. In 2009, Taiwan’s CPI contracted 0.87 percent, but South Korea’s rose 2.83 percent.
The central bank said it would closely monitor the currency fluctuation, but intervention would only come when there are abnormalities such as huge capital inflow or outflow in the market that sends the NT dollar soaring or dropping on a great level.
JITTERS: Nexperia has a 20 percent market share for chips powering simpler features such as window controls, and changing supply chains could take years European carmakers are looking into ways to scratch components made with parts from China, spooked by deepening geopolitical spats playing out through chipmaker Nexperia BV and Beijing’s export controls on rare earths. To protect operations from trade ructions, several automakers are pushing major suppliers to find permanent alternatives to Chinese semiconductors, people familiar with the matter said. The industry is considering broader changes to its supply chain to adapt to shifting geopolitics, Europe’s main suppliers lobby CLEPA head Matthias Zink said. “We had some indications already — questions like: ‘How can you supply me without this dependency on China?’” Zink, who also
The number of Taiwanese working in the US rose to a record high of 137,000 last year, driven largely by Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) rapid overseas expansion, according to government data released yesterday. A total of 666,000 Taiwanese nationals were employed abroad last year, an increase of 45,000 from 2023 and the highest level since the COVID-19 pandemic, data from the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed. Overseas employment had steadily increased between 2009 and 2019, peaking at 739,000, before plunging to 319,000 in 2021 amid US-China trade tensions, global supply chain shifts, reshoring by Taiwanese companies and
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) received about NT$147 billion (US$4.71 billion) in subsidies from the US, Japanese, German and Chinese governments over the past two years for its global expansion. Financial data compiled by the world’s largest contract chipmaker showed the company secured NT$4.77 billion in subsidies from the governments in the third quarter, bringing the total for the first three quarters of the year to about NT$71.9 billion. Along with the NT$75.16 billion in financial aid TSMC received last year, the chipmaker obtained NT$147 billion in subsidies in almost two years, the data showed. The subsidies received by its subsidiaries —
OUTLOOK: Pat Gelsinger said he did not expect the heavy AI infrastructure investments by the major cloud service providers to cause an AI bubble to burst soon Building a resilient energy supply chain is crucial for Taiwan to develop artificial intelligence (AI) technology and grow its economy, former Intel Corp chief executive officer Pat Gelsinger said yesterday. Gelsinger, now a general partner at the US venture capital firm Playground Global LLC, was asked at a news conference in Taipei about his views on Taiwan’s hardware development and growing concern over an AI bubble. “Today, the greatest issue in Taiwan isn’t even in the software or in architecture. It is energy,” Gelsinger said. “You are not in the position to have a resilient energy supply chain, and that,
RSS