Taiwan’s tech sector could face rising costs stemming from the war between Russia and Ukraine, while companies with operations in Eastern Europe are bracing for economic spillover from a war that is being fought “right up to their doorstep,” industry representatives said.
Despite Asia’s geographic distance from the conflict and its relatively low level of financial exposure to Russia and Ukraine, the comprehensive nature of the sanctions imposed on Moscow — including its exclusion from the SWIFT international payment system and a ban on semiconductor exports to Russia — make some spillover inevitable, experts said.
A number of Taiwanese tech firms have facilities in Poland, the Czech Republic and Slovakia, meaning the war is being fought “right up to their doorstep,” Taiwan Electrical and Electronic Manufacturers’ Association (電電公會) deputy secretary-general Yen Su-chiu (顏素秋) said.
Photo: CNA
While Russia accounts for less than 1 percent of Taiwan’s electronics exports, some of these firms might face bad debts and related cash flow problems as a direct or indirect result of the sanctions, she said.
A greater fear is that the economic impact of the conflict would spread across Eastern European markets.
Etay Lee (李宜泰), president of motherboard and graphics card manufacturer Gigabyte Technology Co (技嘉科技), said that while Russian clients accounted for less than 3 percent of the firm’s revenue, he was concerned about the potential for economic spillover in neighboring countries.
For many small to medium-sized Taiwanese firms with investments in the region, the question now is how and when to cut their losses to avoid potential cash flow issues and contractual disputes.
A survey of more than 100 Taiwanese firms with business in Russia and Ukraine, conducted on March 1 and 2, found that trade between the two countries had all but ceased after the outbreak of war on Feb. 24, the Importers and Exporters Association of Taipei (台北市進出口商業公會) said.
The survey found that about 70 percent of respondents were having difficulties collecting debts, while more than 20 percent were concerned about possible contractual disputes due to shipping delays or stoppages, the association said.
A final concern is the key position that Russia and Ukraine hold in the export of specific products, despite forming a combined total of just 2 percent of global trade, said Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at the French investment bank Natixis SA.
In a recent analysis, Garcia-Herrero highlighted Russia’s significant share of the export of products such as neon gas (70 percent), palladium (37 percent) and nickel (9 percent), which are vital to Asia’s semiconductor and electric vehicle battery producers.
“The proportion of these materials is small, but critical in supply chains,” meaning that the costs for these industries would grow if Russia restricts exports, she said.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS