A proposed US-led chip alliance is aimed not only at boosting production, but is also seen as a US move to counter China’s growing influence in the global chip market, Chung-Hua Institution for Economic Research economist Roy Lee (李淳) said on Sunday.
The Chip 4 alliance is a proposed alliance of semiconductor powerhouses in the US, Taiwan, Japan and South Korea, to enhance cooperation on the design and production of sophisticated semiconductors.
With a preliminary meeting of the alliance reportedly expected to take place at the end of this month or early next month, the Ministry of Economic Affairs has proposed continuing its collaboration with the US on supply chain resilience and industrial cooperation, as well as semiconductor supply security.
Photo: CNA
Lee, deputy executive director of the Taiwan WTO & RTA Center at the institute, said that the ministry’s proposal to cooperate on supply chain security was made with Taiwan’s needs in mind.
Although Taiwan is strong in semiconductor foundries, it relies on the US and Japan for the supply of equipment and materials, he said, adding that there are areas where the three nations are reliant on each other.
If the US aims only to bring semiconductor production back home, it only needs to negotiate with individual nations, Lee said.
As such, it is believed that the US might want to work with Taiwan, Japan and South Korea to impose controls on semiconductor exports and technology outflows, forming an anti-China group to exclude Beijing from global semiconductor supply chains, he said.
However, the US proposal might put a certain amount of pressure on South Korea due to its economic ties with China, its biggest trade partner, so Washington wants to talk to Seoul to see whether it plans to join Chip 4, Lee said.
China, including Hong Kong, accounts for almost 60 percent of the exports of South Korean chips, according to a report in the Korea Herald, South Korea’s largest English-language daily, which presents a dilemma for Seoul in having to choose between US technology and the Chinese market, he said.
On the pros and cons of Taiwan’s participation in the alliance, Lee said that Taiwan should participate, given the close semiconductor links between Taiwan and the US, especially regarding supply chains and intelligence gathering.
The US Congress last month passed the CHIPS Act of 2022 to strengthen domestic semiconductor manufacturing, design and research.
In addition, Washington has been promoting the Chip 4 alliance and announced a ban on exports of advanced electronic design automation software tools for 3-nanometer and other advanced chips to China in an effort to curb the development of China’s chip industry.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS