Integrated circuits on a circuit board.
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Taiwan hopes to give China a chance at least in the short term.
The island’s economy minister told CNBC that Taiwan will remain competitive in the semiconductor space, even if China raises its ambitions.
Wang Mei-hua, head of the Ministry of Economic Affairs, quoted the Taiwan Semiconductor Manufacturing Company as saying that the world’s largest manufacturer of contract chips ‘is globally competitive in the manufacture of foundries due to their technical breakthroughs.’
“Taiwan will continue to develop our semiconductor industry. In the short term, I think we will remain competitive,” she told CNBC’s Emily Tan on Wednesday.
Asked if China’s pressure to develop its semiconductor industry is of concern to Taiwan, she points out that the chip manufacturing sector in Taiwan has been developing and strong for several decades.
“We have a very efficient manufacturing base,” she said, according to a translation of her comments in Mandarin.
Global semiconductor shortage
Wang also said Taiwanese companies are doing their best to fulfill orders for car chips amid a global shortage.
Covid-19 latches last year caused an increase in demand for consumer electronics, causing a shortage in the semiconductor sector. As a result, some automakers have been forced to reduce or slow down production.
Our chip manufacturers are already producing at full capacity … by delivering more car chips, it helps not only the global car industry, but also the global economic recovery.
Wang Mei-hua
Taiwan’s head of the Ministry of Economic Affairs
Demand for automatic chips dropped in April 2020, but got steam again in August and September, Wang said.
“It’s not easy to make chips. It does not come out the next day after you place an order,” she explained. “When the orders for automatic chips were cut, other information and communication technology orders came and took up the capacity.”
“Our chipmakers are already producing at full capacity,” she said. “But we have had discussions with them. They are aware that it not only helps the global automotive industry, but also the global economic recovery by delivering more car chips.”
Taiwan and its chip suppliers also met with the US for discussions. “I think Taiwan is very willing to be a friendly supply chain partner in the semiconductor space,” she added.
Raised on Taiwan’s economy
Wang was optimistic about the outlook for Taiwan’s exports, which benefited from the growing demand for laptops due to lockouts and work-from-home arrangements.
“From August to January this year, our exports increased dramatically for six months in a row. This has never happened before,” Wang said.
Reuters reported that Taiwan’s exports in January increased by almost 37% year-on-year to $ 34.27 billion, the highest monthly figure on record.
“So far, our exports have performed well – not only in our high technology, but also in many other sectors, including petrochemicals, and machinery,” she said. “World stocks have fallen and the economy is recovering, even our shipbuilding industry is growing at double digits. This is where we are at present.”
CNBC’s Arjun Kharpal and Michael Wayland contributed to this report.