Russo-Ukraine war: Taiwan anticipates limited impact on chip supply chain

The government on Saturday expected little impact from the war in Ukraine on supplies of key raw materials for semiconductors to Taiwan.

Taiwan is a major chip maker, home to the world’s largest contract chip maker and Asia’s most valuable listed company, Taiwan Semiconductor Manufacturing Company Limited (TSMC)And the key to easing the global shortage of semiconductors, which has forced the closure of auto production lines in some cases.

After a meeting chaired by Vice Premier Shen Jong-chin, the cabinet said the three key raw materials for making chips – the gas neon and C4F6 as well as the metal palladium – would not see much impact.

Taiwan’s chip makers use very little palladium, and neither Ukraine nor Russia is a major source for it, the cabinet said in a statement. Domestic companies also have the ability to refine and “rebuild” palladium, so this should have no impact, it said.

For Neon and C4F6, there are already stocks on the island and the supply chain is diversified, so “the near-term impact is not large”, the cabinet said.

Taiwan’s energy supply is also secure, with 145 days of oil reserves and diverse supply sources, while for liquefied natural gas, or LNG, there are also diverse supply sources.

On financial markets, the cabinet said the Taiwan dollar exchange rate was relatively stable, but the central bank would keep a close watch and take “appropriate management measures” if needed.

The cabinet said that if necessary, the finance ministry will also work to stabilize the stock market.

© Thomson Reuters 2022


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