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Chinese Tech Imports Boost Rival Taiwan's Economy

Ralph Jennings

   TAIPEI, TAIWAN - Regional analysts say Taiwan's recent surge in exports
   despite a global economic downturn is most likely due to an increase in
   orders from Chinese tech firms that hope to depend less on the United
   States in the wake of trade and regulatory disputes.

   Chinese technology hardware firms are stockpiling semiconductors made
   in Taiwan because Taiwanese factories produce some of the world's most
   advanced chips, as shown by a 6% jump in exports from July through
   September, the analysts believe. China has separately announced plans
   to become a tech powerhouse but hasn't perfected chips for 5G
   technology.

   Taiwan and China are meanwhile locked in a political dispute. China
   claims sovereignty over the island, which rejects China's design for
   unification and over the past four years has pushed companies to rely
   less on the Chinese market. The two sides have been self-ruled since
   the 1940s.

   "They know they're not yet able to produce at least the highest-end
   semiconductors needed for 5G, so Taiwan has a huge role to play because
   that's what they do the best, and I don't think they're going to give
   up on that for whatever political, geopolitical reasons," said Alicia
   Garcia Herrero, chief Asia-Pacific economist with the French investment
   bank Natixis. "It's just too juicy."

   Tech hardware is Taiwan's top China-bound export, while information and
   communication technology gear make up half of Taiwan's total exports.

   Over the third quarter, $27.2 billion of Taiwan's $90 billion in
   exports went to China, Bureau of Foreign Trade data show, and Chinese
   importers bought more than one-third of the $32.9 billion in exports
   from the category that covers semiconductors.

   September export data alone reflected "rush shipments" from Taiwan to
   the giant Chinese telecom firm Huawei Technologies and China's biggest
   chip factory Semiconductor Manufacturing International Corp., Taiwan
   government-backed Central News Agency says.

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