US President Donald Trump has threatened to impose up to 100 percent tariffs on Taiwan’s semiconductor exports to the US to encourage chip manufacturers to move their production facilities to the US, but experts are questioning his strategy, warning it could harm industries on both sides.
“I’m very confused and surprised that the Trump administration would try and do this,” Bob O’Donnell, chief analyst and founder of TECHnalysis Research in California, said in an interview with the Central News Agency on Wednesday.
“It seems to reflect the fact that they don’t understand how the semiconductor industry really works,” O’Donnell said.
Photo: Cheng I-hwa, AFP
Economic sanctions would not boost chip manufacturing in the US overnight, because building a chip fab requires billions of dollars and many years of construction, he said.
He described Trump’s economic policies as “shortsighted,” adding that they would not diminish Taiwan’s leading position in advanced chip manufacturing, but rather would drive up the cost of chips made in Taiwan.
“It will have a huge negative impact on every tech-related industry,” O’Donnell said.
The proposed tariffs would harm Taiwanese chipmakers, as well as US tech companies that depend heavily on their chip supplies, including Apple Inc, Nvidia Corp, Qualcomm Inc, Intel Corp and Advanced Micro Devices Inc, he said.
Brian Peck, a former official at the Office of the US Trade Representative, told CNA in a separate interview that the US tech industry, which relies on Taiwanese chips, would face higher prices in the short term.
Those increased costs ultimately would be passed on to American consumers, said Peck, who is an assistant professor at the University of Southern California Gould School of Law.
In the long term, tariffs would put pressure on Taiwan’s semiconductor producers, he said in an interview.
Suppliers of semiconductors based in Taiwan would probably face a decline in sales, because US companies “would be forced either to move manufacturing to the US or find other suppliers that are not subject to the same level of tariffs,” Peck said.
Trump is likely to follow through on the tariff threats, if his goal is to bring chipmaking back to the US, but the US president’s actions have been “somewhat unpredictable,” he said.
Trump might be using the tariff issue as leverage to push Taipei to increase defense spending or make other concessions, as seen in his dealings with Mexico and Canada, Peck said.
In that case, “I think, those would be some of the issues that need to be discussed and worked out” between Taiwan and the US, he said.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
RSS