Business leader of Kinpo advocates for tariff safeguards
Taiwan Seeks to Protect Semiconductor Industry Amid US Tariffs and Geopolitical Tensions
Taiwan's semiconductor industry, a critical driver of the country's economic growth, is facing challenges in the US market. Rock Hsu, the founder and president of Kinpo Group, has urged the government to protect the industry during negotiations with the US.
The US has imposed a 20% tariff on Taiwanese semiconductors, creating cost pressures for companies like TSMC and smaller firms. This tariff could potentially erode Taiwan's competitiveness against South Korean and Japanese rivals.
Besides the tariff, geopolitical risks also pose a threat. Export blacklists and alignment with US China tech policies boost Taiwan's strategic importance but raise fears of Beijing retaliation. This adds complexity to supply chain regionalization strategies.
Another concern is the potential US equity stakes in TSMC. Under the CHIPS and Science Act, the US government is exploring taking minority equity stakes in chipmakers receiving subsidies, including TSMC. Taiwan insists its companies' interests come first, and any equity participation would need Taiwanese government review.
To mitigate these challenges, Taiwan is pursuing several strategies. The government is aiming for policy continuity and leadership stability to maintain coherent semiconductor policies amid trade tension. It is also striving to balance US compliance and cost efficiency, ensuring supply chain regionalization aligns with CHIPS Act incentives while maintaining cost-effective global manufacturing.
Taiwan is also prioritizing negotiation and investment diplomacy. It aims to safeguard its semiconductor sector's competitiveness and strategic autonomy in negotiations about tariffs, export controls, and equity stakes, leveraging its position as a critical global supplier.
Industry leaders, including Rock Hsu, advocate for maintaining Taiwan's sovereign decision-making and private sector independence while navigating US demands and ensuring the resilience of supply chains critical to global tech ecosystems.
The government's negotiating team has vowed to seek a tariff stacking relief during talks with the US. Additionally, the Taipei-based Chinese National Federation of Industries has suggested the government should freeze an electricity rate hike scheduled for September and postpone carbon fee collections to ease the business sector's financial burden. The federation also proposed allowing the NT dollar to depreciate by at least 10% to raise exporters' competitive edge.
In summary, Taiwan's semiconductor industry protection strategies during US-Taiwan trade talks revolve around mitigating tariff and regulatory impacts, preserving strategic autonomy amid US subsidy conditions, and managing geopolitical and leadership uncertainties, all crucial to sustaining its global semiconductor leadership.
[1] Taiwan News [2] Reuters [3] Nikkei Asia [4] Bloomberg [5] Taiwan Semiconductor Manufacturing Company
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