China supply chain plan could pose threat to Taiwan
A plan laid out by Chinese authorities to cultivate a domestic supply chain for the country’s high-tech manufacturing sector is expected to pose a serious threat to Taiwanese companies, government sources said Saturday.
In voicing the concerns, Ministry of Economic Affairs sources said China’s efforts to help its own high-tech supply chain flourish to lower dependence on imported parts have already reduced China’s trade dependence on Taiwan.
The plan unveiled by Beijing in May to create a manufacturing revolution underpinned by smart technologies over the next 10 years could deal a further blow to Taiwan’s exports, they said.
The latest plan for the mainland to grow its own high-tech sector, called “Made In China 2015,” takes aim at various sectors, including the information technology, and puts a heavy emphasis on the semiconductor segment.
According to figures compiled by the Bureau of Foreign Trade (BOFT), the ratio of China’s imports from Taiwan to total imports fell to 7.76 percent in 2014, from 11.3 percent in 2005.
South Korea, a strong rival of Taiwan in the China’s market, has faced a similar trend though the decline has been less precipitous. South Korea’s share of China’s imports fell from 11.64 percent in 2005 to 9.69 percent in 2014, according to the figures.
In 2000, semi-finished products made up almost 60 percent of China’s total imports, but the ratio fell to about 20 percent during the 2012-2014 period, the BOFT statistics showed, indicating that China’s efforts to upgrade its industrial supply have paid off.
The MOEA sources told CNA that the so- called “red supply chain,” referring to the fastgrowing cluster of high-tech components cultivated by the Chinese government, could send more ripples through Taiwan’s hightech sector.
The Made-In-China 2015 plan has set its sights on mastering critical technologies in the integrated circuit sector, ranging from IC design, wafer foundry operations, and IC packaging and testing services, all areas in which Taiwan excels.
It would build on major strides already made by China in upgrading its semiconductor sector. In 2009, China-based HiSilicon Technologies Co. was the only Chinese IC designer to rank in the top 50 in the world, but there were nine Chinese companies in the top 50 in 2014.
While Taiwan Semiconductor Manufacturing Co. ( ) Chairman Morris Chang ( ) still has faith in Taiwan’s semiconductor sector, saying the gap between Taiwan and China is widening instead of narrowing, Charles Kau ( ), president of DRAM maker Nanya Technology Corp. (
), said that China’s high-tech development initiatives “will seriously affect Taiwan’s IC industry.”
Paul Wang ( ), chairman of Internet communications device supplier Sercomm Corp. (
) Chairman, said the government should follow in China’s footsteps and set up a NT$100 billion (US$3.23 billion) fund to support the local semiconductor industry.