Nandini Roy Choudhury, writer
Brief news
- Donald Trump stated that Taiwan does not offer anything for US defense and suggested that Taiwan should compensate the US for its defense.
- TSMC shares closed 2.4% lower in Taiwan following Trump’s comments.
- Taiwan is a major player in the semiconductor industry, producing 66% of the world’s most advanced processors, and the US has expressed concerns about its dependence on Taiwan for chip manufacturing.
Detailed news
Donald Trump, the former President of the United States who is currently in the presidential election for another White House mandate, stated that Taiwan does not offer US anything for the defence which America offers.
The shares of TSMC closed 2.4% lower in Taiwan following the dissemination of Trump’s comments.
As part of an interview with Bloomberg Businessweek that was published on Tuesday, his response was in response to a query regarding whether he would defend Taiwan against China.
Beijing always has considers Taiwan as an area of its territory that is democratically governed, and Chinese President Xi Jinping has previously stated and made it crystal clear that reunification with the mainland is “a historical inevitability.”
Trump stated, “Taiwan should compensate us for its defence.”
“You are aware that we are not distinguished from an insurance company.” He further stipulated, “Taiwan does not provide us with anything,” and seemed to associate his remarks with Taiwan’s semiconductor industry, which is among the most proficient in the world.
Indirectly he pinpointed that “[Taiwan] did acquire approximately one hundred percent of our chip business,” Trump stated.
According to TrendForce data, Taiwan is anticipated to produce 66% of the world’s most advanced processors this year.The U.S. was one time a significant participant in semiconductor manufacturing; however, the industry’s evolving trends, such as the departure of companies from the production of their own circuits, resulted in the growth of Taiwan Semiconductor Manufacturing Co. (TSMC) and other significant Taiwanese companies.
It is anticipated that the United States will contribute 6% to the manufacturing sector.
TSMC is the world’s most advanced and largest chipmaker, and it is responsible for the production of processors for key American companies such as Apple and Nvidia.
For several years, there has been a growing apprehension regarding the world’s dependence on the concentration of semiconductor manufacturing in Taiwan and the potential consequences of a Chinese attack on the island.
In 2022, TSMC Chair Mark Liu declared that the company’s facilities would be rendered “unusable” in the event of a Chinese invasion of Taiwan.
“TSMC cannot be compelled to comply.” Liu declared that the TSMC factory would be rendered inoperable in the event of a military force or invasion.
Under the Biden administration, the United States has endeavored to attract additional semiconductor manufacturing to its shores by offering grants to companies such as Samsung and TSMC to encourage the expansion of their production facilities.
“I give them credit; they took almost 100% of our chip industry,” Trump stated. “We should never have permitted that to occur.”
He also stated, “We are currently providing them with billions of dollars to construct new chips in our country. Subsequently, they will acquire them. In other words, they will construct them, but they will import them back to their country.”
This remark is quite targeted remark on Taiwan which has resulted in lowering the value of the shares of TSMS by 2.4%
Source : CNBC News
