Latest news with #JosephHsu
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Business Standard
2 days ago
- Business
- Business Standard
Why US-China tariff tensions are troubling these Taiwanese PC giants
MSI and Gigabyte, Taiwanese giants in the gaming PC market, are racing to ship products to the US ahead of July 9—the date when a temporary trade truce between the United States and China is set to expire. The truce, which had reduced tariffs on Chinese exports to the US from 145 per cent to 30 per cent, and on US exports to China from 125 per cent to 10 per cent, currently cushions Taiwanese firms. However, as the expiry nears, uncertainty looms large for companies that outsource their manufacturing to China. Despite being headquartered in Taiwan, companies like MSI and Gigabyte rely heavily on Chinese manufacturing. This places their products under the ambit of the US-China trade war. With the US accounting for around 20 per cent of their global sales, the expiry of the truce represents a major risk. According to a report by Nikkei Asia, demand for products like Nvidia's upcoming RTX 5090 graphics cards has surged in the US, straining supply lines as the deadline approaches. MSI chairman Joseph Hsu said the company is struggling to build inventory amid soaring demand, especially in the American market. In response, MSI is expanding its manufacturing footprint in Taiwan and establishing an assembly site in California for AI servers, desktops, and graphics cards. The company is also reportedly entering into partnerships with factories in Vietnam and Thailand to reduce dependence on Chinese production. Gigabyte chairman Dandy Yeh echoed similar concerns. He noted that the company's May revenue hit a record high, driven by early shipments to beat the tariff deadline. Gigabyte is also expediting the construction of a new California facility to bolster its AI server business and build supply chain resilience. Both executives criticised the US policy as destabilising for global businesses. Currency risks compound tariff troubles In addition to trade concerns, Taiwanese exporters are grappling with a rising New Taiwan Dollar (NTD). A stronger NTD makes exports more expensive for US buyers and erodes the profits of exporters after conversion. Yeh warned that currency fluctuations could create new headwinds. For example, Taiwan Semiconductor Manufacturing Company (TSMC) has previously stated that a 1 per cent rise in the NT dollar could reduce its operating margin by 0.4 per cent. MSI and Gigabyte now face similar risks. Global ripple effects of tariff truce expiry The situation of Taiwanese tech companies has become emblematic of broader concerns surrounding tariffs imposed during former US President Donald Trump's administration. Nations including China and India have criticised the US's protectionist stance, citing its adverse impact on global trade. With Chinese exports facing increased tariffs, ripple effects are being felt by manufacturers worldwide. The expiry of the truce on July 9 is expected to have far-reaching implications across global supply chains and tech markets.
Nikkei Asia
2 days ago
- Business
- Nikkei Asia
Nvidia graphics card makers rush shipments to US to beat tariffs
NEW TAIPEI -- Leading gaming PC makers MSI and Gigabyte are racing against time to ship more products to the U.S., including Nvidia's new RTX 5090 graphics cards, before Donald Trump's higher tariffs are set to kick in next month. Joseph Hsu, chairman of MSI, said the Taiwanese company has been building up stock for the U.S. market ahead of the escalation of the tariff war in April. However, because the newest products became available only around April, there was little they could do beforehand.
