Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Morris Chang (張忠謀) yesterday urged the government and the central bank to increase efforts to stabilize the local currency, saying the foreign exchange rate could make or break a company.
Chang said the South Korean government had done a better job in capping the appreciation of the won against the US dollar to protect its companies over the past year compared with the Taiwanese government.
“Why is Samsung so successful? It did a great job itself, of course, but the South Korean government was also a great help to the company, especially on the foreign-exchange front,” said Chang, who doubles as the chief executive of the world’s top contract chipmaker.
Chang made the remarks during a speech at a semiconductor forum arranged by the Taiwan Semiconductor Industry Association (台灣半導體協會) in Taipei.
“As Taiwanese exporters book costs in New Taiwan dollars, the foreign exchange rate can affect their competitiveness,” Chang said.
In April, Chang told investors that a strong NT dollar would erode the profitability of TSMC. For every 1 percent rise in the local currency, it would cut 0.4 percentage points off TSMC’s operating profit margin, he said, meaning the chipmaker would make NT$26 billion, or NT$1 per share, less in net profits this year.
The Japanese government has also sought to ease the strains of a strong yen recently, not to mention Beijing’s tough stance on keeping the Chinese yuan steady, even under massive pressure from the US, Chang said.
“For exporters [the foreign exchange rate] is very important. We don’t know what is going on [with the government’s foreign exchange policy],” he said.
The NT dollar surged 9 percent from NT$33 to around NT$30 in just a few months during the global financial meltdown in 2008. After falling to a low of NT$35.174 on March 2, 2009, it picked up speed again. It rose 3.07 percent in the final quarter of last year to NT$30.368 and appreciated 9.4 percent for the whole year, central bank data showed.
The local currency ended this week up 0.034 percent at NT$29.025 yesterday.
“I hope the government can have a more transparent foreign exchange policy,” Chang said.
Chang also expressed optimism about the future of Taiwan’s semiconductor industry, but warned that global economic weakness had lowered the business confidence of TSMC’s customers over the past few months.
Chang will provide guidance for the company’s fourth-quarter outlook next month.
Yesterday, he reiterated that the company had digested most of its inventories and that the company’s factory utilization would rebound next quarter.
In July, TSMC said its goal to increase revenues by 20 percent this year from NT$419.54 billion (US$14.5 billion) last year would not be achievable because weak global economic growth had reduced demand for chips used in end products across the board — computers, smartphones and consumer electronics.
Chang said that the semiconductor sector would develop in the direction of talent and capital concentration, and that its technical scale would also expand gradually.
The solar energy and LED sectors will enjoy the fastest development, Chang said, adding that medical treatment was also a field where semiconductors could play a role.
With all the opportunities on hand, the industry does not need much help from the government in boosting its development, he said.
“The government does not need to give the sector too muchpreferential treatment, so long as it doesn’t become a stumbling block,” Chang said.
Additional reporting by CNA
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
CRITICAL MOVE: TSMC’s plan to invest another US$100 billion in US chipmaking would boost Taiwan’s competitive edge in the global market, the premier said The government would ensure that the most advanced chipmaking technology stays in Taiwan while assisting Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in investing overseas, the Presidential Office said yesterday. The statement follows a joint announcement by the world’s largest contract chipmaker and US President Donald Trump on Monday that TSMC would invest an additional US$100 billion over the next four years to expand its semiconductor manufacturing operations in the US, which would include construction of three new chip fabrication plants, two advanced packaging facilities, and a research and development center. The government knew about the deal in advance and would assist, Presidential
‘DANGEROUS GAME’: Legislative Yuan budget cuts have already become a point of discussion for Democrats and Republicans in Washington, Elbridge Colby said Taiwan’s fall to China “would be a disaster for American interests” and Taipei must raise defense spending to deter Beijing, US President Donald Trump’s pick to lead Pentagon policy, Elbridge Colby, said on Tuesday during his US Senate confirmation hearing. The nominee for US undersecretary of defense for policy told the Armed Services Committee that Washington needs to motivate Taiwan to avoid a conflict with China and that he is “profoundly disturbed” about its perceived reluctance to raise defense spending closer to 10 percent of GDP. Colby, a China hawk who also served in the Pentagon in Trump’s first team,
The arrival of a cold front tomorrow could plunge temperatures into the mid-teens, the Central Weather Administration (CWA) said. Temperatures yesterday rose to 28°C to 30°C in northern and eastern Taiwan, and 32°C to 33°C in central and southern Taiwan, CWA data showed. Similar but mostly cloudy weather is expected today, the CWA said. However, the arrival of a cold air mass tomorrow would cause a rapid drop in temperatures to 15°C cooler than the previous day’s highs. The cold front, which is expected to last through the weekend, would bring steady rainfall tomorrow, along with multiple waves of showers
RSS