China’s new free-trade agreement with South Korea is expected to erode Taiwan’s tax revenues by NT$7 billion (US$227.87 million) a year, Minister of Finance Chang Sheng-ford (張盛和) said yesterday.
Chang said he arrived at the figures by assuming GDP growth would drop by 0.5 percent, based on the Ministry of Economic Affairs’ forecast.
The GDP retreat would translate into NT$60 billion in terms of absolute value and losses of NT$7 billion in tax revenues, with average tax burdens standing at 12.6 percent, he said.
Meanwhile, Minister of Economic Affairs Woody Duh (杜紫軍) said the pact’s effect on Hiwin Technology Corp (上銀科技), the nation’s biggest machine toolmaker, would be minimal because it produces high-value-added linear guideways and ball screws.
Hiwin can differentiate itself from competitors, so it should be able to maintain a strong competitive position, Duh said.
Duh’s remarks came after Hiwin chairman Eric Chuo (卓永財) said the pact would largely affect small or low-end machine toolmakers in Taiwan instead of firms like his.
A weak Japanese yen would have a greater impact on Taiwan’s machine tool industry than the trade pact, Chuo said.
The challenge is likely to be much harder for Taiwanese machine toolmakers that compete directly with South Korean rivals in vying for a share of China’s market, as South Korean firms can expect zero-tariff market entry after the pact is fully implemented, Duh said.
Taiwanese machine toolmakers could lose their price advantage against Japanese rivals if the yen continues to depreciate against the US dollar, but the situation would be temporary, he said.
“However, the impact of the Beijing-Seoul trade pact on Taiwan will last for a long time,” he said.
Duh said signing free-trade agreements benefits a country’s exports, otherwise there would not be so many nations inking new international trade agreements.
The Economic Cooperation Framework Agreement (ECFA) “early harvest” list also benefited Taiwan’s banks, hospitals and movie industry, Duh said, saying that without the agreement, Taiwan’s 13 banks would not be able to set up branches in China.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks