(Bloomberg) — Taiwan’s exports of integrated circuit chips rose in 2022 for a seventh consecutive 12 months, further solidifying the economy’s leadership status in a worldwide semiconductor industry that has been roiled by US-China tensions and diversifying supply chains.
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Exports of IC chips — that are pivotal components of electronic appliances, computers and smartphones — rose 18.4% from a 12 months earlier, in keeping with Taiwan’s Ministry of Finance. It was also the third straight 12 months of double-digit growth.
“We consider Taiwan is irreplaceable within the near-term within the semiconductor industry,” said Bum Ki Son, economist at Barclays Plc, in an email to Bloomberg News. The firm said efforts by others equivalent to the US to bolster chips production won’t immediately affect diminishing Taiwan’s importance.
Taiwan’s significance within the industry rests on the output of giants like Taiwan Semiconductor Manufacturing Co., which has greater than half of the market share in global semiconductor manufacturing, Son identified — especially within the manufacturing of the world’s most cutting-edge chips.
Global sales of semiconductors have driven exports for Taiwan during a time when global trade has been under immense pressure from a worldwide dropoff in demand.
Also keeping Taiwan necessary to places just like the US are TSMC’s investment decisions, equivalent to its landmark facility in Arizona, its first advanced chip plant within the US.
Barclays’ Son said the longer term of diversification within the industry will rely on where semiconductor fabrication plants are constructed. Son cited potential plans for TSMC to construct plants in Singapore and Japan, a recent Intel Corp investment in Vietnam, and India plans from Foxconn and Vedanta Resources Ltd. as moves which will have lasting implications for the industry.
The outlook within the medium and long run is thus more “fluid,” Son said, “especially as US-China trade conflicts in addition to Covid proceed to underscore the vulnerability of concentrated supply chains.”
–With assistance from Cindy Wang.
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