Although export tariffs have been somewhat unsuccessful in that Chinese companies have been spotted renting the latest chips via cloud computing services, GlobalWafers anticipates more stringent measures.
The Taiwanese manufacturer, and the world’s third-largest provider of silicon wafers, plans to expand its overseas manufacturing operations in response to anticipated upcoming tariffs on chip materials.
GlobalWafers’ decision uncovers concern that more stringent trade measures could disrupt the industry and its supply chain in the coming years.
GlobalWafers predicts worsening trade measures
According to a Bloomberg, the company is “actively” expanding production in six of the nine countries it operates in, including expanding two factories in the US and other facilities in Italy and Denmark.
In an interview with Bloomberg Television, company CEO Doris Hsu stated: “I believe that not only in the US but also some other countries, there will be some special tariff.” The CEO suggested that shifting to local production could help the company circumvent some of the potential tariffs.
This comes in light of ongoing geopolitical tensions relating to China and the recent pandemic-induced chip shortage that had major implications for industries such as automotive production.
Hsu said that geopolitics are now driving how companies do business – the company previously relied heavily on mergers and acquisitions to grow, but it has been shifting its focus to expanding production as a result.
Earlier this year, GlobalWafers secured funding worth up to €103 million from the European Commission and the Italian government to back a 12-inch wafer plant in Novara, near Milan in Italy. A further $400 million was secured from the US Chips Act to expand plants in Texas and Missouri.
As US and European nations continue to implement measures designed to curb China’s technological and military advancements, more manufacturers may explore similar routes in order to at least reduce some of the financial impacts of tariffs and restrictions going forward.
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