[News] With Trump’s Odds of Winning Rising, Concerns Arise on Potential Adjustments in Chip Subsidies

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Republican presidential candidate Donald Trump’s recent remarks on Taiwan “taking about 100% of our chip business” and thus should pay the U.S. for defense have raised concerns in the semiconductor industry. According to a report by Economic Daily, citing a Taiwanese scholar’s observation, as Trump’s odds of winning increase, related chip subsidies may face a higher chance of being adjusted.

In an interview with Bloomberg, Trump mentioned that Taiwan did take 100% of the country’s chip business, and thus should pay for defense, while the U.S. is “no different than an insurance company.”

Bilateral Trade Agreements, Such as US-Taiwan 21st Century Trade Initiative, May be Impacted

Regarding his comments, the report cited the observation by Liu Da-nian, Director of the Regional Development Study Center at the Chung-Hua Institution for Economic Research. The scholar noted that the notion that Taiwan is taking away American chip business is a preconceived misconception, as Taiwan’s chip manufacturing relies on its own R&D achievements, with little government subsidies. Instead of taking the development of Taiwanese industry into consideration, Trump only focused on the outcome, which is very unfair.

Liu said that since Trump opposes any bilateral trade agreements, if he is re-elected, the ongoing US-Taiwan 21st Century Trade Initiative negotiations could be affected, which covering topics including agriculture, labor and digital trade.

Liu analyzed that Trump, with his America-centric approach, would likely push for more of the supply chain to be based in the U.S. Additionally, he would tend to increase investment controls on China and impose heavier tariffs.

Furthermore, he stated that as Trump has threatened to impose a 10% tariff on all imports to the US if elected, Taiwan would not be exempt from this neither. He warned that such actions could disrupt global trade order, and the whole world be concerned about how to deal with Trump during his potential second term.

TSMC Unlikely to Suffer as the CHIPS Act Has Been Approved by Congress

It is also worth noting that in April, Taiwanese foundry giant TSMC is confirmed to receive a USD 6.6 billion subsidy from the U.S. government, under the framework of the CHIPS Act. The company plans to build its third fab in Arizona afterwards, with total investment rising to USD 65 billion.

Regarding the development afterwards, Liu stated that although Trump believes the US CHIPS Act is a misguided policy, the act was passed by the US Congress, making it difficult to overturn and it is already being implemented.

On July 17^th, GlobalWafers joins TSMC as the second Taiwanese semiconductor company to receive subsidies from the CHIPs Act. It is set to receive USD 400m in direct funding to support the opening of two new US-based manufacturing sites for semiconductor wafer production.

Read more

• [News] US Reportedly Targeting China’s Mature Semiconductor Processes Next
• [News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab

(Photo credit: the White House)