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Wednesday, 10 April 2013 09:03

Taiwan concerned about possible Korean conflict

Written by Nermin Hajdarbegovic

We need our chips Kim Jong-un

North Korea’s bellicose rhetoric has caused plenty of concerns already, and although it is very unlikely that it will lead to an actual war, Taiwan is already considering the impact of a possible armed conflict on the tech industry.

Taiwan is the world’s leading semiconductor marker, while South Korea ranks third, although it might outpace Japan quite soon for the silver medal. An armed conflict between the two Koreas would wreak havoc on supply channels in a matter of weeks, and it would also have a massive impact on Taiwanese companies.

Taiwanese Minister of Economic Affairs Chang Chia-juch said Wednesday that any regional turbulence would be bad for the economy. He noted that some short term adjustments to Taiwan’s supply chains could be made to mitigate the effects of the war, but in the long term Taiwan’s economy would be negatively affected.

"We will not be pleased to see it (Korean war) happen," he said, adding that the ministry has already offered suggestions for adjustment to various industry sectors.

However, Arthur Chiao, chairman of the Taiwan Electrical and Electronic Manufacturers Association, believes Taiwan’s DRAM sector won’t be affected by the tensions.

"Taiwan’s DRAM production capacity is in a fixed range and is unlikely to change in the near term,” said Chiao, who is also the chairman of Winbond.

Taiwanese media believe the country’s tech sector might actually benefit from Kim Jong-un’s saber rattling. Chinese phone makers are already placing DRAM orders with Winbond instead of Korean outfits like Samsung and SK Hynix.

However, the effects of a wider regional conflict, involving Japan, China and Taiwan, are simply too disastrous to even contemplate. If it comes to that, the shortage of NAND chips and Samsung phones will be the least of our worries.

Nermin Hajdarbegovic

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