Despite tensions, China buying computer chips made by Taiwan firms

Despite the growing disquiet in Taipei against Beijing, Chinese technology companies have increased orders for computer chips or semiconductors made in Taiwan.

According to a report of VOA, Taiwan has reported a six per cent jump in export from July through September this year.

Experts believe that the jump is most likely a result of increased orders from technology businesses in mainland China.

Alicia Garcia Herrero is a chief Asia-Pacific economist with the French investment bank Natixis. Of Chinese companies, she said, “They know they’re not yet able to produce at least the highest-end semiconductors needed for 5G.” She added that Taiwan makes top-level semiconductors and is unlikely to give up as a leader in the field.

Taiwan factories produce some of the world’s top computer chips. But during the past four years, Taiwan has pushed companies to depend less on the Chinese market.

The two countries have been locked in a political dispute for over 70 years.

China regards Taiwan as a “breakaway province” and has said that it wouldn’t mind using force to claim it. At the same time, Beijing has also accused Washington and Taipei of promoting independence.

China wants to develop the latest telecommunications technology, known as 5G. It also wants to be a powerful force in the technology field worldwide.

Technology equipment is Taiwan’s top export to China. Information and communication technology products make up half of Taiwan’s total exports. Between July and September, $27.2 billion of Taiwan’s USD 90 billion in exports went to China. Those numbers come from Taiwan’s Bureau of Foreign Trade.

Chinese importers bought more than one-third of the USD 32.9 billion in exports from the grouping of products that include semiconductors.

Brady Wang works in Taipei for the market intelligence business Counterpoint Research. He told VOA, “A lot of these goods are being sold in China because China is actually stockpiling inventory...”

Wang said the reason for the move was the state of relations between China and the United States. The two sides have been involved in a trade dispute for more than three years. The US government also considers Huawei a security threat.

“The reason for stockpiling is the recent state of Sino-US relations -- not just Huawei,” Wang said.

Chinese businesses traditionally look to California’s Silicon Valley for the latest in technology.