WASHINGTON An industry group seeking closer U.S.-Taiwan business ties said Taiwan's semiconductor industry will benefit from China's decision last week to drop its value-added tax on chip imports.
The U.S.-Taiwan Business Council (Arlington, Va.) said the deal announced last week by U.S. trade officials "removes a key reason for foreign companies to switch semiconductor manufacturing to China, allowing Taiwan companies to retake orders that had been shifted
to Chinese foundries."
According to the agreement, China will end tax rebates to domestic chip makers by April 2005.
The group added that the removal of the 17-percent tax on chips not produced in China would boost Taiwanese chip makers, who boast relatively strong intellectual property protections and an integrated supply-chain.
The Council will release a report later this week on secord quarter results for the chip industry and the impact of the U.S.-China agreement on the semiconductor industry.