Minister of Economic Affairs Wang Mei-hua (王美花) on Wednesday downplayed the potential impact of new US chip curbs on Taiwan’s economy while urging investors to stay calm and believe in Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) resilience.
“The reason Taiwanese investors are very panicking is because they do not have a good understanding of the very complicated rules,” Wang said in an interview with Bloomberg News.
Wang was in Washington for meetings with US government officials and visited the Taiwan Expo summit.
Photo: Lin Jing-hua, Taipei Times
The government’s preliminary assessment indicates there would be “minimal” implications for Taiwan and its chip industry, because the curbs focus on advanced tech and exclude consumer electronics, Wang said.
“That’s why we derive at this moment that the impact is not going to be too big,” she said, adding that officials need time to study the rules in greater detail.
Wang’s comments came days after the administration of US President Joe Biden announced new restrictions on chip technology and equipment, which sent stocks tumbling. TSMC shares earlier this week fell by the most in 28 years after the US announced tighter controls over chip exports to China, escalating tensions between the world’s biggest economies and disrupting the global semiconductor industry.
TSMC had withheld official comment on the rules until its investors’ meeting yesterday.
“Knowing TSMC with their capability in advanced technologies around chipmaking, I believe they are in the right position to still have more business to come in the future,” Wang said. “So I would urge Taiwanese investors to be confident about TSMC advanced technologies.”
Taiwan and the Biden administration have been discussing joint steps to verify the end users of the chip technology and ensure they are not sold to the Chinese military, Wang said, but declined to share details at this point.
TSMC still continues to develop its most advanced technology in Taiwan, not in the US or European countries, despite offers of subsidies by the Biden administration and other nations.
Wang said the company would invest in the US, but not offshore its most advanced technology.
“In my view, of course semiconductor is a very key industry for Taiwan’s not only economic development, but also security guarantee,” Wang said. “So we will continue to support TSMC develop in Taiwan.”
That poses a dilemma for Biden, who is trying to reduce US reliance on Taiwan and TSMC.
The chip dispute also comes as Biden has started formal negotiations with Taiwan on a trade framework.
Wang said it is Taipei’s “continued wish” to push for a US-Taiwan free-trade agreement and that she is pleased with bipartisan support in the US Congress for such a move.
She said the agreement would be “very significant from a security point of view.”
The government pushed for a free-trade agreement with former US president Donald Trump’s administration, but the request was rejected while negotiations on a US-China deal were ongoing.
The Biden administration wants to be flexible on trade discussions with Taiwan and would not prejudge the outcome, a US Trade Representative spokesman said in response to questions.
Wang also said that a hypothetical Chinese blockade of Taiwan would harm other nations in the region, including China itself, adding that Taipei has made plans for such a scenario.
“Taiwan would not be the only victim in that kind of behavior,” Wang said. “Japan, South Korea, countries in East Asia and even China itself would suffer a lot from it.”
The renewed urgency followed months of heightened tensions between the US and China and a visit to Taiwan by US House of Representatives Speaker Nancy Pelosi that Beijing responded to with aggressive military drills.
“Our wish is to maintain peace,” Wang said. “Having said that, we still have to confront the current situation with proper preparation.”
One of the concerns is whether Taiwan would be able to generate sufficient power given how much it depends on China for imports of fuel.
Wang said the government is addressing those issues and is looking to diversify the sources of its power supply.
“Given the potential implications of any kinds of blockades we have made preparation in our power grid in short term, long term and medium term to have multiple solutions for different time frames,” Wang said.
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