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Taiwan chips will stay aggressive regardless of the growing problem from China, the Taiwanese minister says

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Integrated circuits on a printed circuit board.

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Taiwan hopes to give China a run for its money – at least in the short term.

The island’s economy minister told CNBC that Taiwan would remain competitive in the semiconductor sector even if China increased its chip ambitions.

Wang Mei-hua, director of the Department of Commerce, pointed to Taiwan Semiconductor Manufacturing Company, saying that the world’s largest maker of custom chips is “globally competitive in making foundries because of its technical breakthroughs.”

“Taiwan will continue to develop our semiconductor industry. In the short term, I believe we will remain competitive,” she told CNBC’s Emily Tan on Wednesday.

When asked if China’s drive to develop its semiconductor industry raises concerns for Taiwan, she noted that Taiwan’s chip manufacturing sector has been developed and strong over several decades.

“We have a very efficient manufacturing base,” she said, according to a translation of her comments into Mandarin.

Global semiconductor shortage

Wang also said that Taiwanese companies are doing their best to fill orders for auto chips in a global shortage.

The Covid-19 lockdown last year resulted in a surge in consumer electronics demand, leading to a deficit in the semiconductor sector. As a result, some automakers have been forced to cut or slow production.

Our chipmakers are already producing at full capacity … by delivering more car chips, it is not only helping the global auto industry, but the global economic recovery as well.

Wang Mei-hua

Taiwan’s head of the Ministry of Commerce

Demand for auto chips declined in April 2020 but picked up speed in August and September, Wang said.

“It’s not easy to make chips. They don’t come out the next day after you place an order,” she explained. “When car chip orders were cut, other information and communication technology orders came in and took up capacity.”

“Our chip manufacturers are already producing at full capacity,” she said. “But we have had discussions with them. They understand that delivering more car chips will not only help the global auto industry but also the global economic recovery.”

Taiwan and its chip suppliers have also met for talks with the US. “I think Taiwan is very ready to be a friendly semiconductor supply chain partner,” she added.

Optimistic about Taiwan’s economy

Wang was optimistic about the outlook for Taiwan’s exports, which benefited from growing laptop demand due to lockdowns and work-from-home arrangements.

“From August last year to January this year, our exports grew dramatically for six consecutive months. This has never happened before,” said Wang.

Reuters reported that Taiwan’s exports rose nearly 37% year over year in January to reach $ 34.27 billion, the highest monthly figure on record.

“So far, our exports have done extremely well – not just in our high technology, but in many other sectors, including textile petrochemicals and machinery,” she said. “Worldwide inventories have fallen and the economy is recovering. Even our shipbuilding business is growing in double digits. Here we are right now.”

– CNBC’s Arjun Kharpal and Michael Wayland contributed to this report.

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Katherine Clark