Taiwan’s Tech Firms Ramp Up US Investments to Navigate Tariffs and Serve Key Markets
REPORTER:
Taiwan’s big tech companies are increasing their investments in the US to better serve their largest customer market and to avoid tariffs. Our reporter Ai Chi spoke with economist Darson Chiu of the Confederation of Asia-Pacific Chambers of Commerce and Industry to find out what this means for Taiwan’s role in the global tech supply chain.
Darson Chiu (ECONOMIST, CONFEDERATION OF ASIA-PACIFIC CHAMBERS OF COMMERCE AND INDUSTRY):
We're seeing a number of Taiwanese tech firms making huge investments in the US - the latest being Pegatron buying a factory in Texas. How might this wave of investment stateside impact Taiwan's supply chain?
When these big manufacturers allocate
a portion of their resources to invest in the US
it’s very likely to reduce their production capacity
and related investments in Taiwan.
So this could have an impact
on Taiwan's future GDP growth rate.
Because over the past few decades
Taiwan’s economic growth has mainly relied on investment
and exports from the high-tech industry.
This has been the foundation of Taiwan’s economic development.
Even with the effects of Trump’s reciprocal tariffs
which left our traditional industries largely sluggish
that's been why Taiwan’s economy
is still able to grow by up to 5% this year.
However, if even this growth engine is weakened
in the future due to increased investments in the US
then we should really start preparing in advance.
REPORTER:
Taiwan's economy minister on Wednesday said despite companies like TSMC investing in the US, production of advanced technology will remain in Taiwan. How can Taiwan leverage its position in this situation?
Darson Chiu (ECONOMIST, CONFEDERATION OF ASIA-PACIFIC CHAMBERS OF COMMERCE AND INDUSTRY):
Right now, the most advanced chips
are still produced in Taiwan.
However, in the future
to prevent the outflow of high-end technologies
which could result in Taiwan losing its comparative advantage
in these key areas
we need to continuously move upstream in the supply chain.
This means sustained investment in R&D
so that the technological gap between
Taiwan’s capabilities and those of the facilities
being relocated abroad continues to widen.
We certainly hope for government support
for example, in areas like cultivating talent
as well as through measures such as
tax incentives and various subsidies to stay competitive.
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