Taiwan to simulate impact of US tariffs on semiconductor sector

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TAIPEI (Reuters) -Taiwan will simulate the impact of any U.S. tariffs on the semiconductor industry and seek talks with Washington on the issue, the island’s economy minister said on Tuesday.

The Trump administration is probing the import of chips, along with pharmaceuticals, in a bid to impose tariffs on both on grounds that extensive reliance on foreign production of semiconductors and medicine is a national security threat.

The United States relies heavily on chips imported from Taiwan, a reliance former President Joe Biden sought to end during his term by granting billions of dollars in Chips Act awards to lure chipmakers to expand production in the country.

Speaking to reporters outside parliament, Taiwan Economy Minister Kuo Jyh-huei said he would seek to discuss the matter with the United States and ensure “fair competition” for Taiwanese industry.

The Taiwanese and U.S. chip sectors are complementary, he added.

“As to how much (the tariffs) could be, we will of course carry out simulations,” Kuo said. “On the tariffs issue, we will try as hard as possible to communicate with the U.S. side.”

The level of chip tariffs will be “the outcome of talks”, he added, without elaborating.

Taiwan is home to TSMC, the world’s largest contract chipmaker and a major supplier to companies including U.S. tech giants Apple and Nvidia.

On Monday, Nvidia said it is planning to build AI servers worth as much as $500 billion in the U.S. over the next four years with help from partners including TSMC. That followed Apple’s February promise of half a trillion dollars in U.S. investment over a similar time frame.

TSMC last month announced a $100 billion investment in the United States, on top of previous investment pledges.

Its Taiwan-listed shares closed 1.4% higher on Tuesday, largely in line with the broader market’s 1.8% gain.

(Reporting by Ben Blanchard; Editing by Christopher Cushing)