Taiwan chip exports to China sputter on tensions, falling demand

The total amount of semiconductors that Taiwan shipped worldwide declined 17.3 per cent last month from a year ago. PHOTO: REUTERS

TOKYO – Taiwan’s exports of integrated circuit (IC) chips to China and Hong Kong fell for a fourth month in February as Washington-Beijing tensions simmered and demand for electronics continued to drop off.

Exports of IC chips – which are pivotal components of electronic appliances, computers and smartphones – to China and Hong Kong dropped 31.3 per cent from a year earlier, according to data from Taiwan’s Ministry of Finance. It was the worst decline since 2009, topping January’s 27.1 per cent fall.

China’s market share of Taiwanese IC exports plunged to the lowest level since February 2019, based on Bloomberg calculations of official data.

The total amount of semiconductors that Taiwan shipped worldwide declined 17.3 per cent last month from a year ago. Exports to the United States jumped 22.3 per cent.

Taiwan is the world’s largest producer of cutting-edge chips, and demand has cooled rapidly for the advanced technology that has bolstered its economy. Taiwan is also a geopolitical hot spot, contributing to the fall.

As China has tried to develop its own advanced technologies, the US has moved to block the world’s second-largest economy from doing so. In January, the Biden administration secured an agreement with the Netherlands and Japan to restrict exports of some advanced chipmaking machinery to China.

Chinese President Xi Jinping recently railed at US efforts to hinder its technology progress, rallying his country’s private sector to help overcome “containment” by the US and other countries – a rare direct criticism of China’s biggest trading partner.

US President Joe Biden has also repeatedly stated that Washington will defend against a Chinese attack on Taiwan, comments that have angered Beijing. BLOOMBERG

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