Trade war alone did not cause the slump in Asia’s export hubs, but Donald Trump ‘blocking’ recovery
- Tariff war between the world’s two largest economies has rippled through the semiconductor industry tied to the global roll out of 5G
- Singapore, South Korea and Taiwan have seen sharp drops in growth this year due to declining electronic exports
For the first seven years she designed semiconductors, Cindy Tam was never able to explain exactly what she did for a living to her family.
“The best they could understand was that it was something relating to computers,” said Tam, the engineering manager of Hong Kong-based chip designer, Canaan Semiconductor.
That has changed over the past year, as the US-China trade war morphed into a battle over technology and US President Donald Trump banned Chinese telecoms giant, Huawei, from buying vital American-made chips, offering Tam an easier way of telling her parents what she did for work.
“It was very difficult until the Trump-Huawei situation happened,” she said. “After that, I could say: ‘I am working on those chips that the US is trying to block companies selling to Huawei.’”
More than any other industry – with the possible exception of soybeans – Trump has dragged semiconductors into the global spotlight. Now, the fortunes of the two seemingly incongruous commodities have become entwined. Soybeans and Huawei are unlikely bargaining chips in China-US trade talks.
But insiders say it is hard to discern exactly what impact the trade war is having. Both sectors have also suffered extreme supply chain shocks since July 2018, with the trade war coinciding with a major slowdown in electronics.
Ted Kok, owner of Canaan Semiconductor and Tam’s boss, said that his company actually benefited from trade tensions until this year, as it was taking business from Chinese competitors who were subject to US tariffs.