A US trade group has suggested that Taiwan leverage its strengths in high-tech manufacturing to position itself as a regional technology hub because more businesses would be willing to consider it as such when regular direct cross-strait flights commence.
“Numerous analysts say Taiwan’s best bet would be to leverage its existing strengths in high-tech manufacturing to position itself as a regional hub for technology-intensive industries such as ICT [information and communications technology] and biotech, though they caution that Taiwan has a window of about 10 years to accomplish this before cities in China start catching up,” the Taipei-based American Chamber of Commerce (AmCham) said in the cover story of its business publication, Topics.
Many Taiwan-based ICT companies are already playing important regional and even global roles, the report says, adding that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), for instance, is the world’s largest contract chip maker and that companies with head offices in Taiwan account for 80 percent of the world’s notebook computer production.
“In Taiwan, you have ready access to the electronic manufacturing chain and also access to distribution channels in China,” Peter Kurz, head of Taiwan research for Citi Investment Research, was quoted as saying.
“It’ll be the tech companies that draw foreign companies here, whether Japanese or Western,” he added.
Tristan Liu (呂曜志), an economist with the Taiwan Institute of Economic Research (台經院), reached the same conclusion about Taiwan’s prospects for serving as a regional center.
He views such a hub as encompassing tech-related downstream activity, such as chip packaging, venture capital firms and other financial services aimed specifically at technology companies, and other services such as recruiting and training.
Wang Jiann-chyuan (王健全), an economist with the Chung-Hwa Institution for Economic Research (中經院), estimates that 5 percent to 10 percent of Taiwanese companies based overseas intend to relocate more operations here because of the improvements in cross-strait ties and new, more stringent labor regulations that have been adopted in China.
Lim Tay Her (林泰禾), an analyst with Asia’s leading brokerage CLSA Asia Pacific Markets, notes that if 30 percent of the more than 1 million Taiwanese working in China return, added consumption would have a dramatic impact on the economy since most are highly paid professionals.
Besides technology expertise, Taiwan is also more attractive than Chinese locations in terms of living conditions, protection of intellectual property rights and employee loyalty — and, surprisingly, for costs in many cases. But it still needs to reduce government red tape to be competitive.
“We’ve found that the cost of running a business in Taiwan is actually slightly better than running the same business in other [Asian] locations — including things like cost of living, the cost of expatriate rent, office costs and manufacturing costs,” said Alan Eusden, chairman of AmCham and president of Corning Display Technologies Taiwan Co, a leading maker of glass substrate for liquid-crystal-display panels.
However, the report warns that inadequate infrastructure and the proliferation of red tape might be the two most daunting obstacles standing in the way of Taiwan becoming a regional operations hub.
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Japanese Minister of Finance Katsunobu Kato said. “We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said yesterday in an interview with Fuji Television. Japan is very concerned about how the tariffs might impact the global economy, he added. Kato spoke as nations and firms brace for potential repercussions after Trump unleashed the first salvo of
SUBSIDIES: The nominee for commerce secretary indicated the Trump administration wants to put its stamp on the plan, but not unravel it entirely US President Donald Trump’s pick to lead the agency in charge of a US$52 billion semiconductor subsidy program declined to give it unqualified support, raising questions about the disbursement of funds to companies like Intel Corp and Taiwan Semiconductor Manufacturing Co (台積電). “I can’t say that I can honor something I haven’t read,” Howard Lutnick, Trump’s nominee for commerce secretary, said of the binding CHIPS and Science Act awards in a confirmation hearing on Wednesday. “To the extent monies have been disbursed, I would commit to rigorously enforcing documents that have been signed by those companies to make sure we get
RSS