Taiwan's tech stocks rise on US exemptions, TSMC drops

Shares of major Taiwanese tech companies increased on April 14, 2025 after the United States government granted exemptions from tariffs on smartphones, computers, and other electronics imported from China.

Foxconn, Apple’s largest iPhone assembler, saw a 4% rise in its shares during morning trading.

The broader Taiwan stock index was up approximately 1%.

In contrast, shares of TSMC, the world’s largest contract chipmaker, fell after initially opening higher.

This decline occurred following comments from the US president about plans to impose a tariff on imported semiconductors within the week.

He noted potential flexibility for certain companies in the sector.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Taiwan’s tech sector emerges as a strategic beneficiary in US-China trade tensions

The stock jumps for Foxconn, Quanta, and Inventec reflect a broader pattern of Taiwan’s tech sector benefiting from US-China trade tensions that began years ago.

Taiwan gained an estimated $4.2 billion from trade diversion effects during previous rounds of the US-China trade war, with over $2.8 billion specifically in tech hardware sectors like office machinery and communication equipment1.

This pattern of Taiwan benefiting from trade tensions has been consistent, with around 40 Taiwanese companies shifting production from China back to Taiwan during previous trade disputes, supported by the Taiwanese government’s “Invest Taiwan” program offering low-cost loans2.

Companies like Quanta previously moved production of approximately 4,000 servers per month back to Taiwan, representing about 14% of its production capacity, specifically to avoid tariffs on Chinese exports3.

The current exemptions for smartphones and computers would further strengthen Taiwan’s position as a manufacturing hub, as it allows Taiwanese contract manufacturers to continue serving global tech giants without tariff penalties.

2️⃣ Diverging fortunes in the semiconductor supply chain highlight geopolitical complexities

The stock market reaction shows investors distinguishing between different segments of Taiwan’s tech sector, with TSMC shares declining while hardware assemblers gained.