Taiwan’s computer, server makers and suppliers of related components are to bear the brunt of the newly announced 32 percent tariff to be imposed by the US, as those hardware accounted for 58 percent of exports to the US in February, Ministry of Economic Affairs data showed.
The reciprocal levy of 32 percent is significantly higher than the 10 to 20 percent estimated by most research agencies. For now, Taiwanese semiconductor companies are exempted from the levy after Taiwan Semiconductor Manufacturing Co (台積電) unveiled an additional US$100 billion investment in the US last month.
Semiconductors were the third-biggest export item to the US in February, accounting for 4.6 percent at US$546 million, statistics compiled by the International Trade Administration showed.
Photo courtesy of Wiwynn Corp
The heavy tariff is to take a toll on local manufacturers of computers and servers, and other related companies, including graphic cards and solid-disk drives, as they were the biggest exporters to the US at US$6.84 billion, which were the biggest category of the total US$11.77 billion shipped to the US in February, the data showed.
Last year, local manufacturers shipped US$51.49 billion of such products to the US, more than doubling from a year earlier. Those goods accounted for 46.2 percent of Taiwan’s overall exports of US$111.36 billion to the US, statistics from the administration and the Ministry of Finance showed.
The US is the nation’s second-largest export destination, making up 23.4 percent of exports last year, the highest in 24 years.
The Ministry of Finance in a separate statement attributed the spike in US exports to strong server demand from cloud-service providers, which have hiked capital expenditures to cope with robust demand for artificial intelligence (AI) applications.
To avert adverse effects of the tariff, Wistron Corp (緯創) said on the eve of the tariff announcement that its board had approved a plan to set up a new US subsidiary, Wistron InfoComm (USA) Corp (WIUS), with initial capital of US$45 million.
WIUS plans to invest US$50 million in acquiring land and manufacturing facilities in the US, Wistron said in a statement on Wednesday.
The investment came after Wistron’s server manufacturing arm, Wiwynn Corp (緯穎), unveiled plans on March 1 to build its first US production line in Texas.
Wistron counts Nvidia Corp and other US enterprises among its major customers for general-purpose and AI-enabled servers.
The firm told investors in February that it has been exploring solutions to solve the tariff issue including converting its existing bases in Texas and California into manufacturing facilities.
At the time, some customers still requested the company ship AI servers to the US from its Mexico manufacturing sites and that they would absorb the 25 percent tariff on Mexico, given lower labor costs than the US.
Computer-related components were the second-biggest export items to the US, making up 5.5 percent of Taiwan’s exports in February at US$649 million.
Smartphones and related components, switches and routers came next with total US exports of US$525 million in February. Those suppliers would be subject to the 32 percent levy.
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