Taiwan President Tsai Ing-wen promised on Thursday to help the island's key semiconductor industry overcome difficulties and consolidate its leading position, offering support to a sector increasingly caught up in China-U.S. trade tensions. Companies such as the world's biggest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd, are major suppliers to the likes of Apple Inc and Qualcomm Inc , as well as Chinese firms like Huawei Technologies Co Ltd. In July, TSMC said it had stopped taking new orders from Huawei in May and did not plan to ship wafers after Sept. 15, responding to U.S. curbs on supplying the Chinese company, which the Trump administration views as a security threat.
The deleveraging of China-U.S. supply chains and protectionism on both sides of the Pacific will only drive up costs and limit the flow of ideas, the chairman of Taiwan Semiconductor Manufacturing Co Ltd said on Wednesday. The Trump administration has limited supplies to Chinese tech firms like Huawei Technologies Co Ltd, viewing them as a security threat, and is encouraging U.S. factories in China to move home, part of a broader China-U.S. trade war. China, for its part, is trying to nurture tech champions of its own like SMIC, its biggest chipmaker, and wean itself off reliance on U.S. suppliers.
Investment between the United States and China tumbled to a nine-year low in the first half of 2020, hit by bilateral tensions that could see more Chinese companies come under pressure to divest U.S. operations, a research report said. Investment, both direct investment by companies and venture capital flows, between the two countries fell 16.2% to $10.9 billion in January-June from the same period a year earlier - also hurt by the coronavirus pandemic, according to figures from consultancy Rhodium Group. Citing national security risks posed by Chinese technology firms, U.S. President Donald Trump's administration has sharply expanded actions to hobble Chinese companies.