An escalating US-Turkey row is expected to have limited near-term effects on local manufacturers, including machinery suppliers, given their slim exposure to the Turkish market, government officials and industry representatives said yesterday.
Turkey’s financial markets have been rattled since US President Donald Trump on Friday last week announced sanctions on Ankara due to its detention of a US pastor.
On Monday, the Turkish lira tumbled to a record low against the US dollar and prompted concern that the currency crisis might spread to other emerging economies.
“The lira crisis is different from the Asian financial crisis in terms of intensity,” Deputy Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday, dismissing the likelihood of repeating the 1997 Asian financial crisis that stemmed from Thailand’s mounting foreign debt and caused a sequence of currency devaluations in East Asia.
“The problem is rooted in Turkey. We have not yet seen any spillover effect,” Kung said, adding that the Ministry of Economic Affairs would closely monitor developments.
Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) chairman Alex Ko (柯拔希) also said that the impact should be minimal.
“Local machinery suppliers export less than US$100 million of goods to Turkey a year, even though the country is the third-largest export destination for Taiwanese machinery makers,” Ko told the Taipei Times on the sidelines of a news conference for the annual Taipei International Plastics & Rubber Industry Show and the Taipei International Shoe Making Technology Show.
“We are not worried. Most local manufacturers have received strong orders,” Ko said.
Local machinery manufacturers are to see exports grow at an annual rate of more than 10 percent this year, he added.
Last year, machinery makers exported US$25.6 billion of goods, up 21 percent from the previous year, TAMI statistics showed.
Taiwanese machine tool makers would not be directly harmed by the lira’s collapse, as suppliers take orders in US dollars, Taiwan Machine Tool and Accessory Builders’ Association (TMBA, 台灣工具機暨零組件公會) secretary-general Carl Huang (黃建中) said by telephone.
Demand also looks healthy, as the TMBA has not seen large-scale exits of foreign investors and manufacturers from Turkey, meaning there is still demand there, Huang said.
Foreign manufacturers have over the past few years made Turkey their major manufacturing hub in Europe, he said, adding that it is not easy for them to pull their entire supply chains out of the country overnight.
Taiwan External Trade and Development Council (TAITRA, 外貿協會) chairman James Huang (黃志芳) echoed Kung’s comments.
“Based on our initial understanding, the impact on the supply chain is not significant,” Huang said.
TAITRA plans to arrange a trip to Turkey in the second half of the year, Huang said.
Separately, TAMI said it expects the plastics and shoe technology trade shows to bring NT$20 billion (US$648.13 million) in orders to local manufacturers, as the number of visitors is expected to reach a record high.
The trade shows started yesterday and are to run through Sunday at Taipei Nangang Exhibition Center’s Hall 1.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to