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.
Taiwanese firms have increased investment in the Philippines in recent years as Manila’s ties with Washington deepen and global supply chains continue to shift away from China, an expert at the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The Philippines had not been among Taiwanese investors’ top choices in Southeast Asia, CIER Taiwan ASEAN Studies Center director Kristy Hsu (徐遵慈) said at a seminar in Taipei. However, Taiwan’s investment in the country has grown significantly since the COVID-19 pandemic, reaching US $257 million last year, a high in recent years, she said. Although Taiwan’s total investment in the Philippines still lags
Intel Corp regards Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) as a longstanding partner, as the US chipmaker would continue outsourcing production of advanced chips to TSMC, Intel chief executive officer Lip-Bu Tan (陳立武) said yesterday. “I don’t look at people as competitors. I look at the collaboration... Nvidia is also, you know, a good friend,” Tan told a news conference following his keynote speech at the Computex trade show in Taipei. “It’s a very trusted partnership for us... We are a big, top customer for them, and we’re going to continue doing that,” he said, referring to TSMC, the world’s largest foundry
Hon Hai Precision Industry Co (鴻海精密) yesterday said it would work with US chipmaker Intel Corp to jointly develop and deploy next-generation artificial intelligence (AI) infrastructure and intelligent computing platforms in a move to capture booming demand for AI computing systems. Hon Hai, also known as Foxconn Technology Group (富士康), said in a statement that the partnership would combine its global manufacturing scale, system integration expertise and AI data center deployment capabilities with Intel’s strengths in processor architecture, silicon technologies and software ecosystem. The companies said they plan to work on equipment used in AI data centers, including server racks powered by
Artificial intelligence (AI) agents would supplant smartphones as the center of people’s digital lives, fundamentally reshaping personal devices and driving a major computing upgrade cycle, Qualcomm Inc CEO Cristiano Amon said yesterday. In his keynote speech for this year’s Computex trade show in Taipei, Amon said that the rise of "agentic AI" — AI systems capable of reasoning, planning and carrying out tasks autonomously — would transform how people interact with technology across phones, PCs, vehicles and wearable devices. Describing the technology as the next major evolution in computing, Amon said that "2026 is the year of agents.” For decades, smartphones have sat
RSS