US presidential contender Donald Trump’s suggestion that Taiwan, which is central to the global chip industry, should pay for its own defences against China, triggered falls in the stocks of some of the world’s largest chipmakers, The Guardian reports.
The newspaper said shares in semiconductor and related tech companies had already plunged on Wednesday after the former president’s comments, as well as a report that suggested Joe Biden’s administration was considering the strictest controls on the trade of chips to China.
The stocks of Taiwan Semiconductor Manufacturing Company Limited (TSMC), the world’s largest contract chipmaker, fell by 2.4% on Thursday. That followed a 7% fall the previous day, when Trump questioned why the US was acting as Taiwan’s “insurance” when, he claimed, it had taken away America’s chip business.
According to The Guardian, the comments by Trump, who is the favourite to win the US presidential race in November, indicate that military support for Taiwan in the event of action from China would not be guaranteed if he re-entered the White House.
Commenting on China’s aggression towards its neighbour, Trump said he “wouldn’t feel too secure” if he were Taiwan. He said the US was “no different than an insurance company”, and suggested Taipei should be paying the US to defend it and claimed Taiwan “doesn’t give us anything”.
Taiwan produces more than 90% of the world’s most advanced chips, mostly through TSMC, and is a big supplier to Apple and Nvidia.