A predicted sharp rise in Chinese imports of US goods as part of a “phase one” trade deal signed by the nations last week would squeeze other trade partners, but should have a limited impact on Taiwan, DBS Bank Ltd (星展銀行) said on Friday.
Taiwan has been a major beneficiary of the US-China trade dispute and reaped the rewards of order transfers since the tit-for-tat tariffs began in July 2018. However, China’s pledge to purchase US$200 billion of US goods and services over the next two years has raised concerns that demand for Taiwanese goods could fall.
Singapore-based DBS economist Ma Tieying (馬鐵英) said it is unlikely that Taiwanese exports to China would be replaced by US goods, if China is to honor its purchase commitments.
“The overlap of the US’ and Taiwan’s export structure is low,” Ma said in a report, adding that China’s imports from Taiwan are largely concentrated in electrical machinery and equipment, while its US imports are equally comprised of agricultural goods, transport equipment and electrical machinery.
“Moreover, China’s imports from Taiwan are partly driven by intracompany supplies, ie, the purchase of semiconductors and other components by Taiwanese tech firms based in China from their parent companies. Substitution of these products should be unlikely,” Ma said.
As for China’s pledge to open its financial services sector to US firms, including banking, securities, insurance, asset management and credit-rating services, the impact on Taiwan’s financial institutions should be small, she said.
“Taiwanese financial institutions operating in the Chinese market currently focus on providing corporate banking services for the Taiwanese firms based there,” Ma said. “Direct competition with US counterparts is limited.”
However, as the US-China trade dispute has shifted to focus on technology, the risk of supply chain disruption has not fully subsided, despite the preliminary trade agreement addressing intellectual property and technology transfer, the DBS economist said.
Last week, Reuters reported that the US government would still push for tougher rules to block shipments of foreign-made goods to Chinese telecommunications giant Huawei Technologies Co Ltd (華為).
“From a long-term perspective, Taiwanese tech firms would still find it necessary to shift sensitive production out of China and to diversify their supply chains,” Ma said.
The sentiment was echoed by S&P Global Ratings, which on Friday said: “The chance that negotiations for a final agreement will stall, or enforcement of the phase one deal doesn’t materialize, continue to cast uncertainties over corporate supply-chain strategies.”
Yuanta Securities Investment Consulting Co (元大投顧) analysts, led by Calvin Wei (魏建發), on Thursday said a more stringent ban on sales to Huawei would negatively affect the 5G supply chain and undercut the global economy, as Huawei is not only the world’s largest supplier of mobile base stations and optical communication equipment, but also the second-largest smartphone brand on the planet.
It would also adversely impact Taiwanese firms in the supply chains of networking, handset, semiconductor and printed circuit board (PCB) sectors, Yuanta analysts said in a report.
“Based on our analysis, optical communication and base station equipment suppliers in the networking sector would see the greatest impact on sales (by 10 to 30 percent), followed by handset sector (10 to 25 percent), semiconductor sector (15 percent) and the PCB sector (10 percent),” they said.
Shiina Ito has had fewer Chinese customers at her Tokyo jewelry shop since Beijing issued a travel warning in the wake of a diplomatic spat, but she said she was not concerned. A souring of Tokyo-Beijing relations this month, following remarks by Japanese Prime Minister Sanae Takaichi about Taiwan, has fueled concerns about the impact on the ritzy boutiques, noodle joints and hotels where holidaymakers spend their cash. However, businesses in Tokyo largely shrugged off any anxiety. “Since there are fewer Chinese customers, it’s become a bit easier for Japanese shoppers to visit, so our sales haven’t really dropped,” Ito
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 —
Taiwan Semiconductor Manufacturing Co (TSMC) Chairman C.C. Wei (魏哲家) and the company’s former chairman, Mark Liu (劉德音), both received the Robert N. Noyce Award -- the semiconductor industry’s highest honor -- in San Jose, California, on Thursday (local time). Speaking at the award event, Liu, who retired last year, expressed gratitude to his wife, his dissertation advisor at the University of California, Berkeley, his supervisors at AT&T Bell Laboratories -- where he worked on optical fiber communication systems before joining TSMC, TSMC partners, and industry colleagues. Liu said that working alongside TSMC
RSS