Chip exports to the US reflect the country’s efforts to strengthen its semiconductor supply. Photo credit: Shutterstock

Taiwan’s chip exports to the US rose for a 26th consecutive month in May, 2023, in spite of a downturn within the global semiconductor market.

Exports of chipmaking machines to the US increased 59.3% compared to the previous year, while exports to China and Hong Kong plummeted 44.2%.

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Meanwhile, US imports of Taiwanese semiconductors increased 9% compared to the previous year, while exports to China and Hong Kong dropped 14.3%, according to figures from the Ministry of Finance in Taipei.

The surge in US imports may reflect the success of the country’s bold industrial policy, as set out in the bipartisan CHIPS and Science Act, which came into force in August, 2022. The CHIPS act aims to bring science and tech innovation and advanced manufacturing onto US home soil. Under the act, the US government will provide $52.7bn in tax and investment credits to subsidise semiconductor investment.

Nevertheless, Taiwan’s overall chip exports slumped 8% – an increase on the previous month’s drop of 7.1% – reflecting a wider slowdown in demand. 

On 9th June, the Taiwan Semiconductor Manufacturing Company (TSMC) reported that its net revenue for May 2023 was approximately $5.74bn, an increase of 19.4% from April 2023 and a decrease of 4.9% from May 2022.

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Revenue for January through May 2023 totalled $27.09bn, a decrease of 1.9% compared to the same period in 2022.

Chipmakers are experiencing falling demand due to the global economic outlook and rising interest rates that are depressing consumer spending. For example, the telecoms chipmaker, Qualcomm, reported a 12% year-on-year slide in revenue for the first quarter of its fiscal 2023 earlier this year, citing lower consumer demand for smartphones.

Meanwhile, US sanctions against the Chinese chip sector (for example, its restrictions on SMIC’s access to wafer fab equipment) as well as similarly weak smartphone and PC demand have depressed Chinese imports.