While the export tariffs have not proven very successful, as Chinese companies rent the latest chips through cloud computing services, GlobalWafers expects stricter measures to come.
The Taiwanese manufacturer and the world’s third-largest supplier of silicon wafers plans to expand its manufacturing operations overseas in response to expected future tariffs on chip materials.
GlobalWafers’ decision highlights concerns that stricter trade measures could disrupt the industry and its supply chain in the coming years.
GlobalWafers predicts worsening trade measures
According to a Bloombergthe company is “actively” expanding production in six of the nine countries where it operates, including expanding two factories in the US and other facilities in Italy and Denmark.
In an interview with Bloomberg TelevisionThe company’s CEO Doris Hsu said, “I believe there will be special tariffs not only in the US but in a number of other countries as well.” The CEO suggested that switching to local production could help the company avoid some of the potential tariffs.
This comes against the backdrop of ongoing geopolitical tensions surrounding China and the recent chip shortage caused by the pandemic, which has had a major impact on sectors such as auto manufacturing.
According to Hsu, geopolitics is now driving the way companies do business. Previously, the company relied heavily on mergers and acquisitions to grow, but as a result, the focus has shifted to expanding production.
Earlier this year, GlobalWafers secured up to €103 million in funding from the European Commission and the Italian government to support a 12-inch wafer fab in Novara, near Milan, Italy. Another $400 million was secured under the US Chips Act to expand fabs in Texas and Missouri.
As the US and European countries continue to implement measures aimed at curbing China’s technological and military advances, more manufacturers may explore similar routes to mitigate at least some of the financial impact of future tariffs and restrictions.
