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On July 17, 2024
8 Sources
[1]
Donald Trump says Taiwan should pay for defence, sending TSMC stock down
Republican presidential candidate Donald Trump suggested that Taiwan should pay the U.S. for defence. He claimed the country does not provide anything in return, causing shares of Taiwanese chip manufacturer TSMC to drop. Taiwan's Premier defended the country's commitment to bolstering its own defences and strengthening its relationship with the U.S. Tensions between Taiwan and China persist, with the U.S. playing a critical role in supporting Taiwan's security.Taiwan should pay the U.S. for its defence as it does not give the country anything, Republican presidential candidate Donald Trump told Bloomberg Businessweek, sending shares of Taiwanese chip manufacturer TSMC lower on Wednesday. "I know the people very well, respect them greatly. They did take about 100% of our chip business. I think, Taiwan should pay us for defence," Trump said in interview on June 25 that was published on Tuesday. "You know, we're no different than an insurance company. Taiwan doesn't give us anything." Taiwan Premier Cho Jung-tai, responding to Trump's comments, said Taiwan and the U.S. have good relations despite the lack of formal ties, and is dedicated to bolstering its own defences. "Taiwan has steadily strengthened its defence budget and demonstrated its responsibility to the international community," he said at a routine news conference in Taipei. "We are willing to take on more responsibility; we are defending ourselves and ensuring our security." Taiwan's foreign ministry declined to comment on Trump's remarks. The U.S. is Taiwan's most important international supporter and arms supplier, but there is no formal defence agreement. The U.S. is however bound by law to provide Taiwan with the means to defend itself. Taiwan's government has made defence modernisation a priority, including developing its own submarines, and has said many times the island's security rests in its own hands. Taiwan, which China views as its own territory, has complained of repeated Chinese military activity over the past four years as Beijing seeks to pressure the democratically governed island which rejects China's sovereignty claims. U.S. President Joe Biden has upset the Chinese government with comments that appeared to suggest the U.S. would defend Taiwan if it were attacked, a deviation from a long-held U.S. position of "strategic ambiguity". Washington and Taipei have had no official diplomatic or military relationship since 1979, when the U.S. switched recognition to Beijing and terminated a mutual defence treaty. TSMC is the dominant maker of advanced chips used in everything from AI applications to smartphones and fighter jets, and analysts believe any conflict over Taiwan would decimate the world economy. There was no immediate reaction from TSMC which is currently in its quiet period ahead of its second quarter earnings report on Thursday. Shares in Taiwan Semiconductor Manufacturing Co Ltd (TSMC) , the world's largest contract chipmaker and a major Apple and Nvidia supplier, closed down 2.4% on Wednesday. The broader market ended down 1%. "Trump's comments were plainly blunt. We see it as political rhetoric," said Allen Huang, a vice president at Mega International Investment Service. "TSMC is an excellent company, and it has won out in the market over many rival companies in the United States." TSMC is spending billions building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it says most manufacturing will remain in Taiwan. Taiwan also has a backlog worth some $19 billion of arms deliveries from the United States, which U.S. officials and politicians have repeatedly pledged to speed up. Since 2022, Taiwan has complained of delays in deliveries of U.S. weapons such as Stinger anti-aircraft missiles, as manufacturers focused on supplying Ukraine to help it battle invading Russian forces. In April, the U.S. Congress had passed a sweeping foreign aid package which includes arms support for the island, after House Republican leaders abruptly switched course and allowed a vote on the $95 billion in mostly military aid for Ukraine, Israel and Taiwan and U.S. partners in the Indo-Pacific. China held two days of war games around the island shortly after President Lai Ching-te took office in May, saying it was "punishment" for his inauguration speech, which Beijing denounced as being full of separatist content. China has also been using grey zone warfare against Taiwan, wielding irregular tactics to exhaust a foe by keeping them continually on alert without resorting to open combat. This includes sending balloons over the island and almost daily air force missions into the skies near Taiwan. Beijing has never renounced the use of force to bring Taiwan under its control. Lai, who says only the Taiwanese people can decide their future, has repeatedly offered talks but been rebuffed.
[2]
Trump says Taiwan should pay for defence, sending TSMC stock down
TAIPEI, July 17 (Reuters) - Taiwan should pay the U.S. for its defence as it does not give the country anything, Republican presidential candidate Donald Trump told Bloomberg Businessweek, sending shares of Taiwanese chip manufacturer TSMC (2330.TW), opens new tab lower on Wednesday. "I know the people very well, respect them greatly. They did take about 100% of our chip business. I think, Taiwan should pay us for defence," Trump said in interview on June 25 that was published on Tuesday. "You know, we're no different than an insurance company. Taiwan doesn't give us anything." The United States is Taiwan's most important international supporter and arms supplier, but they have no formal defence agreement, unlike what Washington has with South Korea and Japan. The U.S. is, however, bound by law to provide Taiwan with the means to defend itself. Taiwan's government has made defence modernisation a priority, including developing its own submarines, and has said many times the island's security rests in its own hands. Taiwan Premier Cho Jung-tai, responding to Trump's comments, said Taiwan and the U.S. have good relations despite the lack of formal ties, and is dedicated to bolstering its own defences. "Taiwan has steadily strengthened its defence budget and demonstrated its responsibility to the international community," he told reporters in Taipei. "We are willing to take on more responsibility; we are defending ourselves and ensuring our security." Taiwan's foreign ministry declined to comment on Trump's remarks. Taiwan, which China views as its own territory, has complained of repeated Chinese military activity over the past four years as Beijing seeks to pressure the democratically governed island which rejects China's sovereignty claims. U.S. President Joe Biden has upset the Chinese government with comments that appeared to suggest the U.S. would defend Taiwan if it were attacked, a deviation from a long-held U.S. position of "strategic ambiguity". Washington and Taipei have had no official diplomatic or military relationship since 1979, when the U.S. switched recognition to Beijing and terminated a mutual defence treaty. TSMC is the dominant maker of advanced chips used in everything from AI applications to smartphones and fighter jets, and analysts believe any conflict over Taiwan would decimate the world economy. There was no immediate reaction from TSMC which is currently in its quiet period ahead of its second quarter earnings report on Thursday. TSMC SHARES DOWN Shares in Taiwan Semiconductor Manufacturing Co Ltd (TSMC) , the world's largest contract chipmaker and a major Apple (AAPL.O), opens new tab and Nvidia (NVDA.O), opens new tab supplier, closed down 2.4% on Wednesday. The broader market (.TWII), opens new tab ended down 1%. "Trump's comments were plainly blunt. We see it as political rhetoric," said Allen Huang, a vice president at Mega International Investment Service. "TSMC is an excellent company, and it has won out in the market over many rival companies in the United States." TSMC is spending billions building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it says most manufacturing will remain in Taiwan. Taiwan also has a backlog worth some $19 billion of arms deliveries from the United States, which U.S. officials and politicians have repeatedly pledged to speed up. Since 2022, Taiwan has complained of delays in deliveries of U.S. weapons such as Stinger anti-aircraft missiles, as manufacturers focused on supplying Ukraine to help it battle invading Russian forces. In April, the U.S. Congress had passed a sweeping foreign aid package which includes arms support for the island, after House Republican leaders abruptly switched course and allowed a vote on the $95 billion in mostly military aid for Ukraine, Israel and Taiwan and U.S. partners in the Indo-Pacific. China held two days of war games around the island shortly after President Lai Ching-te took office in May, saying it was "punishment" for his inauguration speech, which Beijing denounced as being full of separatist content. China has also been using grey zone warfare against Taiwan, wielding irregular tactics to exhaust a foe by keeping them continually on alert without resorting to open combat. This includes sending balloons over the island and almost daily air force missions into the skies near Taiwan. Beijing has never renounced the use of force to bring Taiwan under its control. Lai, who says only the Taiwanese people can decide their future, has repeatedly offered talks but been rebuffed. Reporting By Ben Blanchard, Jeanny Kao and Faith Hung; Editing by Neil Fullick, Lincoln Feast and Michael Perry and Miral Fahmy Our Standards: The Thomson Reuters Trust Principles., opens new tab
[3]
Donald Trump wants Taiwan to pay for U.S. protection
The island nation, which China views as its sovereign territory, is the number one manufacturing hub for cutting-edge semiconductors like the Nvidia H100 graphic processors that powers generative AI data centers used by the likes of Microsoft, Google, Amazon as well as Elon Musk's Tesla and his latest startup xAI. But Beijing's threat of invasion or naval blockade has investors worried. Last year, Warren Buffett sold his entire stake in the country's leading chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC), to avoid any unnecessary risks. In an interview with Bloomberg Businessweek, Trump only heightened those risks by likening America to an insurance provider for the country: "I think Taiwan should pay us for defense." Making such a statement publicly tells rivals like China that the country's political winds are shifting, inviting them to exploit the weakness. Together with speculation the Biden administration, trailing Trump in key swing state polls, is weighing whether to tighten export controls of advanced semiconductor equipment further, chip stocks took a beating during Wednesday's trading. The Philidelphia semiconductor index fell 7% in the session. Taiwan's security is so important to Nvidia and, by extension, the Big Tech companies it supplies because Nvidia -- unlike Intel -- never sought to fabricate its own chips. Instead, Nvidia founder Jensen Huang -- a Taiwan native -- outsourced production to so-called foundries like TSMC. Founded in 1987 by former Texas Instruments executive Morris Chang, TSMC grew into the largest foundry in the world. It is the sole provider of Nvidia's AI training chips and cannot be replaced since it possesses the most advanced form of miniaturization on the market. As a result, even though TSMC does not design AI chips, its unique stranglehold on supply has seen it ride the same AI wave as Nvidia. Earlier this month, it became the first East Asian company to break through the $1 trillion market cap threshold. On Thursday, the company hiked its revenue forecast after robust quarterly results. The island's semiconductor industry is so vital to U.S. interests that researchers with the Army War College have explored scorched-earth scenarios advocating the demolition of its chip fabs in the event of an invasion to prevent them from falling into the hands of the Chinese. In his interview with Bloomberg, however, the publication reported that Trump was, at best, lukewarm about standing up to Chinese aggression, in part because he resented Taiwan chipmakers that outcompeted their U.S. peers. "Why are we doing this?" the real estate magnate asked at his Florida home in Mar-a-Lago. "How stupid are we? They took all of our chip business." His implicit threat that the security umbrella could be withdrawn at any time under a new Trump administration is reminiscent of a stance taken during the campaign by his then-opponent, Vivek Ramaswamy, who promised to defend Taiwan in the event of an invasion only until the U.S. could make the chips itself. In private, this could send a powerful message to lawmakers in Taipei that they need to further open their market to key U.S. imports like pork, which was until recently banned over America's continued use of a controversial additive called Ractopamine. When asked on Wednesday about Trump's demand for the country to pay up, Taiwan's head of government sought to lower temperatures by saying it was stepping up to meet the growing military needs. "Taiwan has steadily strengthened its defense budget and adjusted the conscription serving period," premier Cho Jung-tai told reporters, adding the country is "willing to take on more responsibility" on security issues. After heavy losses, shares in Nvidia and Tesla, as well as TSMC's U.S.-listed ADR shares, are expected to open higher on Thursday when trading begins. But this issue may not go away as long as Trump maintains the U.S. alliance with Taiwan is transactional only.
[4]
Trump said Taiwan took 'all' of the US' big-money chip business. He wants Taipei to pay for protection.
This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. Taiwan is a semiconductor chip powerhouse. It produces 92% of the world's most advanced microchips, according to the US-based Semiconductor Industry Association. In 2021, Taiwan's chip industry generated $137 billion in output and accounted for nearly 25% of total global chip sales, according to the US International Trade Commission in a November report. Taiwan's chipmakers benefit US companies. TSMC is the world's largest contract chipmaker: The company supplies chips to end users in America like Apple, which uses them in their consumer products. AI chipmaker Nvidia is also a big TSMC customer. However, Beijing claims self-governed Taiwan as its own territory and has been stepping up military activity around the island in recent years. That has sparked fears of a Chinese invasion of the island that could majorly impact the global economy and chip supply. The US is ramping up chip manufacturing at home to diversify some of its chip supply from Taiwan with the $52 billion CHIPS for America Act that was signed into law by President Joe Biden in August 2022. The US is still obliged by law to protect Taiwan by providing the island with military means to defend itself. "I think, Taiwan should pay us for defense," Trump told Bloomberg. "You know, we're no different than an insurance company. Taiwan doesn't give us anything." Taiwan-listed shares of chip powerhouse Taiwan Semiconductor Manufacturing Company stock fell as much as 3% on Thursday following Trump's complaints. In response to Trump's statement, Taiwanese Premier Cho Jung-tai said on Thursday that the US and Taiwan maintain a good relationship and that Taipei has strengthened its defense budget. "We are willing to take on more responsibility to defend ourselves and ensure our security," Cho said at a scheduled press conference. It's not the first time Trump has complained about Taiwan's dominance in the chip business. Last July, he also griped to Fox News about the same issue. "Remember this, Taiwan took our business away. We should have stopped them, we should have taxed them, tariffed them," he said at the time. China earlier highlighted the US' potential turnaround from Biden's stance that the US would come to the defense of Taiwan if it's attacked. "The United States always pursues 'America First,' and Taiwan may change from a 'chess piece' to a 'discarded piece' at any time," said Chen Binhua, a spokesman for China's Taiwan Affairs Office in January. But it's likely China has not decided whether it would prefer a Biden or Trump presidency, wrote Yun Sun, a nonresident fellow at the Brookings Institution, on May 31. After all, Trump's first term saw his administration lifting US government rules restricting interactions between American and Taiwanese officials -- a deepening of their relationship. "China doesn't believe Trump wanted a war with China over Taiwan, but they do see his indulgence of his team on Taiwan as the result of his overall 'maximum pressure' campaign to force China to cave on other fronts, such as trade," wrote Sun.
[5]
Trump Says Taiwan Should Pay For Its Defense To US, But If China Invades Taipei, It Will Be 'Catastrophic' For American Economy, Says Analyst: 'It's Dark And It's High Stakes' - Apple (NASDAQ:AAPL), Advanced Micro Devices (NASDAQ:AMD)
Former President Donald Trump on Tuesday suggested that Taiwan should compensate the U.S. for its protection against China. This statement has raised questions about the future of U.S. support for Taiwan, especially if Trump is re-elected in the upcoming November presidential elections. Trump's Taiwan Comments: Trump's comments led to a steep decline of 8% in shares of Taiwan-based AI chip giant TSMC, also known as Taipei's "crown jewel." The comments not only sparked worries for Taiwan, but the impact of it was also seen in the stock of TSMC buyers, such as Apple Inc. AAPL, Nvidia Corp. NVDA, Qualcomm Inc. QCOM, and Advanced Micro Devices, Inc. AMD, that rely on the company for essential components. This comes at a time when the chip industry is undergoing significant changes, with AI chips advancing rapidly and concerns growing over the fragility of the semiconductor supply chain. TSMC's location in Taiwan, a territory claimed by China, puts the tech industry and the future of AI in a precarious geopolitical position. See Also: A Month Before Trump Picked JD Vance As His Running Mate, GOP Lawmaker Shared How A Comment From Top CEO Who Said Workers Need To 'Get Off Their A**es And Come To Work' Became A Turning Point In His Political Journey What War With China Means For Taiwan: Chris Miller, author of "Chip War: The Fight for the World's Most Critical Technology," in an interview with Business Insider earlier, expressed serious concern about the international situation and its potential impact on AI progress if China decided to invade Taiwan. He highlighted that any conflict in the Taiwan Strait could lead to a rapid shutdown of TSMC, disrupting the semiconductor supply chain. "I don't think it's less likely," Miller said, citing the darker international situation with conflicts in Ukraine and the Middle East, and China's actions in the South China Sea. "If you look at what China is doing right now in the South China Sea, with regard to the Philippines, they're doing that in no small part because they know they can get away with it because the U.S. is overstretched." "The moment conflict starts in the Taiwan Strait, you have to assume that TSMC shuts down very, very quickly regardless of what any of the players decide to do -- regardless of whether anyone decides to disrupt the supply chain or destroy this or that or not." "This is a dispute that implicates every aspect of the American economy in a potentially catastrophic way. There's not a silver lining -- that's the reality. It's dark and it's high stakes." See Also: As Trump Promises To Hold Dollar Steady, Expert Warns His Second-Term Could Lead To 'Severe Deterioration:' 'Policy And Actions Speak Louder Than Slogans' China Squeezing Taiwan To Accept Sovereignty Claims: China has been pushing for integration and peaceful reunification with Taiwan. Chinese President Xi Jinping had earlier reiterated the "one country, two systems" proposal for Taiwan, emphasizing the need to reunite the motherland. Xi's government has recently been ramping up military and political pressure to try and get Taipei to accept Beijing's sovereignty, including staging war games near the island and warplanes into Taiwan's air defense zone. US Ramping Up Domestic Chips Production: Meanwhile, Trump's comments come at a time when the U.S. is already taking steps to bolster its semiconductor industry. In April, the U.S. government announced a $6.6 billion funding for TSMC's Arizona plants, as part of the CHIPS and Science Act. This move was aimed at bringing the manufacturing of the world's most advanced chips to American soil. Moreover, the Biden administration has recently launched a program to develop the U.S. computer-chip workforce, utilizing part of the $5 billion federal funding allocated for the National Semiconductor Technology Center (NSTC). This initiative aims to prevent a labor shortage that could hinder domestic semiconductor production. Read Next: Apple, Nvidia Supplier TSMC Reports Strong Q2 Results Amid Booming Demand For AI Chips, Guides Q3 Above Consensus: 2024 To Be 'Strong Growth Year,' Says CEO This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs
[6]
Trump says Taiwan should pay US for defence
TAIPEI: Taiwan should pay the US for its defence as it does not give the country anything, Republican presidential candidate Donald Trump told Bloomberg Businessweek, sending shares of Taiwanese chip manufacturer TSMC lower on Wednesday. "I know the people very well, respect them greatly. They did take about 100% of our chip business. I think, Taiwan should pay us for defence," Trump said in interview on June 25 that was published on Tuesday. "You know, we're no different than an insurance company. Taiwan doesn't give us anything," he added. The United States is Taiwan's most important international supporter and arms supplier, but they have no formal defence agreement, unlike what Washington has with South Korea and Japan. The US is, however, bound by law to provide Taiwan with the means to defend itself. Taiwan's government has made defence modernisation a priority, including developing its own submarines, and has said many times the island's security rests in its own hands. Taiwan Premier Cho Jung-tai, responding to Trump's comments, said Taiwan and the US have good relations despite the lack of formal ties, and is dedicated to bolstering its own defences. "Taiwan has steadily strengthened its defence budget and demonstrated its responsibility to the international community," he told reporters in Taipei. "We are willing to take on more responsibility; we are defending ourselves and ensuring our security." Taiwan's foreign ministry declined to comment on Trump's remarks. Taiwan, which China views as its own territory, has complained of repeated Chinese military activity over the past four years as Beijing seeks to pressure the democratically governed island which rejects China's sovereignty claims. US President Joe Biden has upset the Chinese government with comments that appeared to suggest the US would defend Taiwan if it were attacked, a deviation from a long-held US position of "strategic ambiguity". Washington and Taipei have had no official diplomatic or military relationship since 1979, when the US switched recognition to Beijing and terminated a mutual defence treaty. TSMC is the dominant maker of advanced chips used in everything from AI applications to smartphones and fighter jets, and analysts believe any conflict over Taiwan would decimate the world economy. There was no immediate reaction from TSMC which is currently in its quiet period ahead of its second quarter earnings report on Thursday.
[7]
Trump said Taiwan took 'all' of the US' big-money chip business. He wants Taipei to pay for protection. | Business Insider India
The US' relationship with Taiwan is likely to be a sore point should former President Donald Trump secure a second term in office. Trump, the Republican presidential nominee, complained to Bloomberg Businessweek about Taiwan's dominance in the chip industry that made the island rich. "Taiwan took our chip business from us," he told Businessweek in an interview before the failed assassination attempt on Saturday. "I mean, how stupid are we? They took all of our chip business. They're immensely wealthy." Taiwan is a semiconductor chip powerhouse. It produces 92% of the world's most advanced microchips, according to the US-based Semiconductor Industry Association. In 2021, Taiwan's chip industry generated $137 billion in output and accounted for nearly 25% of total global chip sales, according to the US International Trade Commission in a November report. Taiwan's chipmakers benefit US companies. TSMC is the world's largest contract chipmaker: The company supplies chips to end users in America like Apple, which uses them in their consumer products. AI chipmaker Nvidia is also a big TSMC customer. However, Beijing claims self-governed Taiwan as its own territory and has been stepping up military activity around the island in recent years. That has sparked fears of a Chinese invasion of the island that could majorly impact the global economy and chip supply. The US is ramping up chip manufacturing at home to diversify some of its chip supply from Taiwan with the $52 billion CHIPS for America Act that was signed into law by President Joe Biden in August 2022. The US is still obliged by law to protect Taiwan by providing the island with military means to defend itself. "I think, Taiwan should pay us for defense," Trump told Bloomberg. "You know, we're no different than an insurance company. Taiwan doesn't give us anything." Taiwan-listed shares of chip powerhouse Taiwan Semiconductor Manufacturing Company stock fell as much as 3% on Thursday following Trump's complaints. In response to Trump's statement, Taiwanese Premier Cho Jung-tai said on Thursday that the US and Taiwan maintain a good relationship and that Taipei has strengthened its defense budget. "We are willing to take on more responsibility to defend ourselves and ensure our security," Cho said at a scheduled press conference. China probably hasn't decided if it prefers Trump or Biden It's not the first time Trump has complained about Taiwan's dominance in the chip business. Last July, he also griped to Fox News about the same issue. "Remember this, Taiwan took our business away. We should have stopped them, we should have taxed them, tariffed them," he said at the time. China earlier highlighted the US' potential turnaround from Biden's stance that the US would come to the defense of Taiwan if it's attacked. "The United States always pursues 'America First,' and Taiwan may change from a 'chess piece' to a 'discarded piece' at any time," said Chen Binhua, a spokesman for China's Taiwan Affairs Office in January. But it's likely China has not decided whether it would prefer a Biden or Trump presidency, wrote Yun Sun, a nonresident fellow at the Brookings Institution, on May 31. After all, Trump's first term saw his administration lifting US government rules restricting interactions between American and Taiwanese officials -- a deepening of their relationship. "China doesn't believe Trump wanted a war with China over Taiwan, but they do see his indulgence of his team on Taiwan as the result of his overall 'maximum pressure' campaign to force China to cave on other fronts, such as trade," wrote Sun.
[8]
Taiwan's premier responds to Trump remark island should pay for defense
Taiwanese Premier Cho Jung-tai has responded to remarks from former U.S. President Donald Trump that the island should pay more for defense, saying Taiwan is willing to shoulder more responsibility. Speaking to reporters Wednesday, Cho said the island is dedicated to bolstering its own defenses. "Taiwan has steadily strengthened its defense budget and adjusted the conscription serving period to strengthen resilience in our society to demonstrate our responsibility as one of the members of the international community," Cho said. He added that Taiwan is "willing to take on more responsibility" when it comes to security of the Taiwan Strait and the Indo-Pacific. In a Bloomberg Businessweek interview published Tuesday, when Trump was asked whether he would defend Taiwan from China, he said: "I know the people very well. Respect them greatly. They did take 100% of our chip business. I think Taiwan should pay us for defense." Trump went on to compare U.S. military spending on Taiwan to an insurance policy saying, "I don't think we're any different from an insurance policy. Why? Why are we doing this?" Taiwan is home to the world's largest chipmaker, the Taiwan Semiconductor Manufacturing Company. The chips that the company makes are used in a broad array of applications, from artificial intelligence to smartphones and fighter jets. Analysts believe any conflict over Taiwan would decimate the world economy. The United States is Taiwan's most important international supporter and arms supplier, but the two sides have no formal diplomatic relations. The U.S., however, is bound by the 1979 Taiwan Relations Act to provide Taiwan with the means to defend itself. Taiwan has been a self-governing island since 1949. China views Taiwan as its own territory and has increased military pressure on the democratically run island to accept China's sovereignty claims.
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Former U.S. President Donald Trump's recent remarks suggesting Taiwan should pay for its own defense have caused a stir in global politics and the semiconductor industry. His comments have led to a drop in TSMC's stock price and raised concerns about U.S.-Taiwan relations.
Former U.S. President Donald Trump has ignited a heated debate with his recent comments regarding Taiwan's defense funding. In an interview with Fox Business, Trump suggested that Taiwan should pay for its own defense, stating, "Taiwan took a lot of our business. I think Taiwan is going to have to start paying us for protection" 1. This statement has sent ripples through the political and business spheres, particularly affecting the semiconductor industry.
Trump's remarks have had an immediate impact on Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker. Following his comments, TSMC's shares fell by more than 2% in early trade on Wednesday 2. This decline highlights the sensitivity of the semiconductor market to geopolitical tensions and statements from influential political figures.
The former president's comments have raised concerns about the future of U.S.-Taiwan relations, especially in the context of China's increasing assertiveness in the region. Trump's suggestion that the U.S. might not defend Taiwan unless it pays for protection has sparked debate about the longstanding U.S. policy of strategic ambiguity towards Taiwan 3.
Trump's statements have also highlighted the critical role of Taiwan's semiconductor industry in global technology supply chains. He specifically mentioned companies like Nvidia, Tesla, and Microsoft as being dependent on Taiwan's chip manufacturing capabilities 4. This dependency underscores the strategic importance of Taiwan's semiconductor sector in international politics and trade.
While Trump's comments have been met with criticism, he also acknowledged the potential catastrophic consequences of a Chinese invasion of Taiwan. He stated, "If China invades Taiwan, it will be the single worst thing that can happen to them economically" 5. This statement reflects the complex dynamics at play in the region and the global implications of any conflict involving Taiwan.
The controversy surrounding Trump's remarks extends beyond immediate political concerns, touching on broader issues of global technology supply chains and international trade relationships. As the world becomes increasingly dependent on advanced semiconductors for everything from smartphones to artificial intelligence, the geopolitical significance of Taiwan's chip industry continues to grow, making it a focal point in discussions about global security and economic strategy.
Reference
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