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Taiwan warns of hit to exports due to US restrictions on chips

The island nation has warned of a potential hit to semiconductor manufacturing due to recent U.S. moves to reduce reliance on Taiwan’s advanced technology in the field.

The recent U.S. semiconductor law, along with a similar proposal in Europe, “could directly or indirectly affect the exports of Taiwan’s critical industries,” according to industry representatives.

“Uncertainty will affect Taiwan’s semiconductor manufacturing and exports, although the extent of the impact is unclear”

The nearly $50 billion Chip and Science Act, passed by the US government in August to boost domestic research and development in semiconductors, illustrates the Biden administration’s efforts to reduce dependence on foreign suppliers, including Taiwan.

Taiwan’s conductor supply chain, represented by Taiwan Semiconductor Manufacturing Co., is leading the market, and TSMC is also building a chip manufacturing plant in the US. But at the same time, the United States itself is striving to become the leading power in the field of microchip production to counter Beijing.

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Taiwan has proposed expanding some tax incentives for companies that invest in local technology research and manufacturing in an attempt to shore up its semiconductor industry.

The signing of the Chip Act has already spurred US chip companies such as Micron Technology Inc (NASDAQ:MU) to plan billions of dollars in new investments. US Secretary of Commerce Gina Raimondo also recently pointed out the need to shift the production of advanced chips from Taiwan to the US.

The US recently unveiled sweeping restrictions on the sale of semiconductors and chip manufacturing equipment to the second global economy.

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