Tsai Gov’t Should Learn from TSMC’s Wisdom

 Tsai Gov’t Should Learn from TSMC’s Wisdom

China Times Editorial (Taipei, Taiwan)

June 11, 2019

 Translation of an Excerpt

Up to now, the US-China trade war has not shown any possibility of coming to an end; even if the two countries eventually reach a certain agreement, their bilateral relations and the big picture of the global economy and trade would not be able to "return to before," many countries thus have been facing pressure to "choose sides." Under such circumstances, how the government should make choices would probably affect Taiwan's economy and industries in the future; we believe that the best strategy for the government should be to emulate the wisdom of TSMC.

In the trade war launched against the Mainland, the US cut the competitiveness of Mainland export merchandise through hiking tariffs; however, what has greatly impacted the Mainland is the ban on Huawei. This ban not only prohibits US firms from supplying Huawei, but even foreign enterprises, if the proportion of components “originating in the US” exceeds 25%, will also be banned from supplying Huawei. American enterprises are on the top of the list, being ordered to cut their shipments to Huawei, on account of the ban; even other foreign enterprises are suspending shipments to Huawei.

When many international enterprises opted to cut their shipments to Huawei at the first opportunity, TSMC, being considered to have the greatest destructive force to Huawei once it should join the ranks of cutting shipments, however, continues their normal supply shipments under the limelight of various circles. The TSMC version is that before every TSMC product is shipped, it will undergo a “flow of due diligence investigation", ensuring that the shipment conforms with trade norms; if the product passes this investigation, then it will be shipped to the client. Viewed from the current situation, because there is still a distance before the 25% provision, TSMC does not need to change its current shipping mode of its products to Huawei.

The trade war will probably cause the transfer of supply chains as well as the home-coming of Taiwan businesses from the Mainland; Taiwan should of course find all means to attract Taiwan businessmen to invest at home. In the long term, there will probably be changes in the export reliance of Taiwan on the Mainland. However, no matter what, the government should avoid choosing sides and make their stance known, nor is it appropriate to exert pressure on enterprises, influencing or even intending to guide choices of enterprises. The professionalism and wisdom with which TSMC handles the ban on Huawei is sufficient to be a paradigm for the government to emulate.

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