US-China friction may hit Apple chain: Morris Chang - Taipei Times
Tue, May 08, 2018 - Page 12 News List

US-China friction may hit Apple chain: Morris Chang

Staff writer, with CNA

The Apple supply chain could suffer if a trade war erupts between the US and China, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Morris Chang (張忠謀) said on Sunday.

In an interview with the Financial Times, Chang said that the escalating threat of higher tariffs between the two nations would adversely affect companies like his in the global supply chain.

“China does a lot of assembling of final products, so the US-China trade dispute might also affect us,” said Chang, whose firm supplies processors for the iPhone. “It is a new challenge and it is something that I have not had to face in the past, but my successors will have to face that risk. What can they do? I don’t know.”

TSMC generates about half of its US$33 billion revenue from mobile devices, the Financial Times said.

In addition to TSMC, many other Taiwanese electronics firms are part of the Apple supply chain, including iPhone assemblers Hon Hai Precision Industry Co (鴻海精密), Pegatron Corp (和碩) and Wistron Corp (緯創); smartphone camera lenses supplier Largan Precision Co (大立光); and metal casing maker Catcher Technology Co (可成).

Taiwanese suppliers to Apple Inc account for about 40 percent of the local equity market’s total capitalization, market statistics showed.

Chang’s comments came after the US during two days of negotiations in Beijing last week called for a US$200 billion reduction of its trade gap with China over the next two years, and for China to suspend advanced manufacturing subsidies.

The Financial Times also cited Taipei-based Yuanta Securities (元大證券) analyst Sam Kao as saying that Apple suppliers such as Hon Hai, Pegatron and Wistron, which do not have major production sites outside China, could face the most pressure from a trade war between the US and China.

TSMC yesterday told reporters that its operations have so far not been affected by the trade dispute, but added that it was keeping a close eye on bilateral negotiations and the resulting decisions.

Chang, nicknamed the “father of semiconductors” in the global industry, is planning to retire next month after 30 years with TSMC.

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