Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table.
In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US.
“The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said.
Photo: Bloomberg
Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of the Taipei-based Confederation of Asia-Pacific Chambers of Commerce and Industry, on Saturday said that TSMC’s orders are currently at full capacity, especially with the rise of artificial intelligence (AI), where demand for high-end chips exceeds supply and there are no viable substitutes.
That means that TSMC is a price-setter in the market, rather than a price-taker, Chiu said.
As a result, the more tariffs imposed on TSMC chips, the higher the costs US importers would have to bear, which could lead to inflation and ultimately be passed on to domestic consumers.
Unlike the US tariffs on Chinese products such as plastics, where importers can switch to suppliers from countries such as Vietnam, “TSMC’s chips cannot be easily replaced, even Intel struggles to produce them,” he said.
Eventually, US importers would have no choice but to pay the higher tariffs, he said.
Given that Trump’s advisers are highly respected economic academics, who would certainly not introduce a tariff policy without having considered its impact on the competitiveness of the US AI sector, what Trump really wants is probably to force TSMC to the negotiating table, Chiu said.
Meanwhile, Hsieh Chin-ho (謝金河), chairman of the Chinese-language Wealth Magazine, on Saturday said that he believes Trump hopes to pressure TSMC into increasing its investment in the US.
He said that TSMC, the world’s largest contract chipmaker, should extend goodwill toward the Trump administration.
Taipei-based former Bloomberg Opinion columnist Tim Culpan in an online opinion piece on Friday said that if Trump goes further than stand-alone chips and adds import duties to a broader category of semiconductor products including graphics processing units, modules and subsystems, then the results could be “disastrous.”
“The US doesn’t have the capacity to manufacture anywhere near a similar volume of equivalent devices. It would take months, if not years, to build the factories, spin up the tools, and then go through the qualification process,” he wrote in the article titled “How a TSMC Tax Would be a FAFO Move for the US.”
In the opinion piece, Culpan said that the US could impose a tax on Taiwanese chips, but it would hurt the very companies Trump used to bolster his tech credentials.
TSMC would not be the one to suffer the most if Trump imposes the tariff hike, Culpan said.
“The company is capacity constrained in advanced-packaging for AI chips and clients have no other choice,” he wrote.
“In fact, the biggest victims would be the three men who so proudly and obsequiously fawned over the new president the first full day he was in office: Larry Ellison, Sam Altman and Masayoshi Son,” he said.
Ellison, Altman and Son head Oracle Corp, OpenAI and Softbank Group Corp respectively.
“What I think Trump really wants is for TSMC to kiss the ring and pledge to invest more in the US,” he wrote.
STRONG INTEREST: Analysts have pointed to optimism in TSMC’s growth prospects in the artificial intelligence era as the cause of the rising number of shareholders The number of people holding shares of chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) hit a new high last week despite a decline in its stock price, the Taiwan Depository and Clearing Corp (TDCC, 台灣集保) said. The number of TSMC shareholders rose to 2.46 million as of Friday, up 75,536 from a week earlier, TDCC data showed. The stock price fell 1.34 percent during the same week to close at NT$1,840 (US$57.55). The decline in TSMC’s share price resulted from volatility in global tech stocks, driven by rising international crude oil prices as the war against Iran continues. Dealers said
Taiwan’s natural gas supply remains stable through the end of May, despite rising concerns about potential disruptions to Qatari liquefied natural gas (LNG) supplies due to escalating conflicts in the Middle East, the Ministry of Economic Affairs said yesterday. The ministry in a statement said that Taiwan has completed preparations for natural gas supply and shipping schedules through the end of May. It has also made plans to increase natural gas imports from regions outside the Middle East in June to ensure a stable supply, it added. Taiwan sources natural gas from 14 countries and is not solely dependent on the Middle East,
China is clamping down on fertilizer exports to protect its domestic market, industry sources said, putting an additional strain on global markets that were already grappling with shortages caused by the US-Israeli war on Iran. China is among the largest fertilizer exporters — shipping more than US$13 billion of it last year — and it has a history of controlling exports to keep prices low for farmers. Shipments through the war-blocked Strait of Hormuz account for about one-third of the sea-borne supply. This month, Beijing banned exports of nitrogen-potassium fertilizer blends and certain phosphate varieties, sources said. The ban, which has not
Grab Holdings Ltd agreed to buy Delivery Hero SE’s Foodpanda operations in Taiwan for US$600 million, a deal that marks its first foray outside of its Southeast Asian base. The cash acquisition will allow Grab to expand into 21 cities across Taiwan, the Singapore-based ride-hailing and delivery company said in a statement yesterday. Grab expects the transaction to be completed in the second half, subject to regulatory approvals. The purchase will give Grab a presence on the island of about 23 million people, helping it to expand beyond its intensely competitive home market. Grab has seen growth slow dramatically as it takes
RSS