Wednesday, September 11, 2019
Trade disputes between Japan and South Korea will likely result in fundamental changes to both countries' high-tech industry supply chains, while opening the door for enhanced cooperation between the Korean and Taiwanese high-tech sectors, according to Pei-Lin Pai, VP of technology R&D for Winbond Electronics.
Unlike the trade war between the US and China - the world's two largest economies - the Japan-South Korea trade spat is more about historical grudges between the two countries and therefore will result in different consequences, said Pai. In October 2018, South Korea's top court ruled Japan-based companies should compensate for the use of forced labor during World War II. The forced labor ruling is believed to be the motivation behind Japan's decision to tighten controls on exports of several critical semiconductor and panel making materials to South Korea.
The role of Taiwan's high-tech industry is expected to improve amid the trade tensions between Japan and South Korea, Pai indicated. In particular, the row has brought closer the high-tech sectors in South Korea and Taiwan, with new cooperation emerging, Pai said.
While Taiwan's supply chain serves as alternative chip and component sources of Huawei and other China-based device vendors that are striving to reduce dependence on the US amid the ongoing US-China trade war, Taiwan's supply chain could also be a potential alternative source of chip- and panel-making components and materials for Korea-based vendors such as Samsung and SK Hynix amid the Japan-Korea trade tensions.
Taiwan's semiconductor industry spans the complete supply chain, from IC design to manufacturing to the backend, and has well-developed upstream and downstream vertical integration. Taiwan's supply chain has its flexibility to cope with volatile macro conditions, Pai believes.
Pai made the remarks during a recent technology forum hosted by Digitimes in Hsinchu.
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