One-third of Taiwanese companies miss opportunities to trade with foreign partners because of an inability to assess risks involved, according to a survey by Euler Hermes, an international trade credit insurer.
The past five years have seen a significant shift in trade focus from traditional markets such as the US and Europe toward Asian countries — particularly China, Euler Hermes said.
The shift has enabled the nation’s exporters to seize opportunities generated by the growing environment, but has also created new challenges that they had not experienced in the past, said Edmond Lee (李一民), general manager of Euler Hermes in Hong Kong, Taiwan and Korea.
“The tremendous increase in Asian regional trade means that many companies are now doing business with partners they have never traded with before,” Lee said.
An inability to assess potential business partners from overseas has meant that more than one-third of Taiwanese firms have missed out on business opportunities, Lee said, citing a survey of 300 domestic firms.
When asked what their greatest challenge was, 22 percent cited cash flow management and 13 percent identified collection of account receivables, the survey showed.
The findings show the importance of liquidity if buyers are unable to pay, Lee said, adding that nonpayment of invoices weakens a business and reduces its investment capacity. This is a particularly frequent issue when venturing into new markets or accepting new buyers, Lee added.
Trade credit insurance is an effective protection against nonpayment that can account for 40 percent or more of a company’s assets, Lee said.
Insurance can also increase a company’s confidence in extending credit to new customers, making the company more competitive, said Lee whose company set up an office in Taiwan on Wednesday last week.
Policyholders often benefit from access to bank funding at lower interest rates due to their protected cash flow, he said.
Three-quarters of Taiwanese exports are traded within the region, with China topping the list at 41 percent, the survey indicated, while developed markets like Europe and the US account for a combined 25 percent share of total exports.
Euler Hermes is present in more than 50 countries and keeps a global network of 1,500 risk experts and economists to monitor the financial health of exporters’ customers domestically and across multiple countries and sectors.
“Reducing the risk of nonpayment begins with gathering relevant and up-to-date information,” Lee said.
Euler Hermes’ worldwide risk information database tracks companies active in markets representing 92 percent of global GDP.
CHIEF OPERATING OFFICERS: Y.J. Mii, who is in charge of R&D, and Y.P. Chyn, who is responsible for fab operations and management, start their new positions today Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday promoted Y.J. Mii (米玉傑) and Y.P. Chyn (秦永沛) as co-chief operating officers (COO) of the world’s biggest contract chipmaker, signaling the formation of a succession team. The latest executive reshuffle comes after TSMC chairman Mark Liu (劉德音) in December last year announced that he is to retire this year. CEO C.C. Wei (魏哲家) has been recommended as his successor while continuing to serve in his current position. Mii and Chyn, as well as the company’s human resources, finance, legal and corporate planning units, are to report directly to Wei, a company statement released after the
SEMICONDUCTORS: Under India’s chipmaking incentive plan, the government would bear half the cost of any approved project, with an initial budget of US$10 billion for the task The Indian government, after years of watching from the sidelines of the chips race, now has to evaluate US$21 billion of semiconductor proposals and divvy up taxpayer support between foreign chipmakers, local champions or some combination of the two. Israel’s Tower Semiconductor Ltd is proposing a US$9 billion plant, while India’s Tata Group has put forward an US$8 billion chip fabrication unit, people familiar with the matter said. Both projects would be in Indian Prime Minister Narendra Modi’s home state of Gujarat, the people said. Semiconductors have grown into a key geopolitical battleground, with the US, Japan and China investing heavily in
AI PRIORITIZED: Analysts said the move was a good strategic decision for Apple, which was still years away from producing a vehicle and facing a cooling market Apple Inc is canceling a decade-long effort to build an electric vehicle (EV), people with knowledge of the matter said, abandoning one of the most ambitious projects in the history of the firm. Apple made the disclosure internally on Tuesday, surprising about 2,000 employees working on the project, the sources said. The decision was shared by Apple chief operating officer Jeff Williams and Kevin Lynch, a vice president in charge of the effort, the sources said. The two executives told staff that the project would begin winding down and that many employees on the EV team — known as the Special Projects Group
The Japanese government-backed research group developing semiconductors is to partner with US start-up Tenstorrent Inc on the design of its first advanced artificial intelligence (AI) chip. Tenstorrent, led by Tesla Inc and Apple Inc veteran Jim Keller, would license its design for part of Japan’s AI accelerator and also codesign the overall chip, the US company said yesterday at a joint event in Tokyo. Working with the open-source RISC-V standard, Tenstorrent aims to provide customers with an alternative to the leaders Nvidia Corp and Arm Holdings PLC, who have their own so-called instruction sets to communicate between hardware and software. The government is