Commerce tied to politics: Pegatron chair

REAL WORLD ISSUES: Demand for the supply of high-tech chips often runs afoul of the shoals of geopolitics, said the chairman of one of the major involved companies Technology products are no longer purely commercial goods, but are closely intertwined with geopolitical competition and cooperation, Pegatron Corp chairman Tung Tzu-hsien (童子賢) said yesterday, citing media reports that China might allow the import of Nvidia Corp’s H200 artificial intelligence (AI) chips.Global technology and industrial development are increasingly shaped by geopolitics, with chips, AI and semiconductor equipment serving as bargaining chips between national economies, Tung told reporters on the sidelines of the Taipei Game Show.Technology was once a force that improved people’s lives and promoted cross-border cooperation, but is increasingly used as a tool in geopolitical negotiations, he said.Under former US president Joe Biden, Washington adopted a technology containment strategy toward China, while US President Donald Trump’s approach is that “everything can be negotiated with money,” with market access increasingly tied to economic conditions, Tung said.Taking the possible sale of H200 chips in China as an example, he said that shipments would be subject to a so-called “toll,” requiring US companies to pay a 25 percent export tax to the US government. Shipment volumes would be capped, he added.China has signaled its response, with reports indicating that exports of H200 chips would be allowed only on a limited basis and restricted to companies such as Alibaba Group Holding Ltd (阿里巴巴), Tencent Holdings Ltd (騰訊) and ByteDance Ltd (字節跳動), Tung said.Chinese authorities would simultaneously encourage the adoption of domestically developed systems to reduce reliance on foreign high-end semiconductors, he said.Tung’s remarks came on the same day after Nvidia chief executive Jensen Huang (黃仁勳) expressed optimism that Beijing would permit the sale of the H200 chips to Chinese buyers.“The actual license for H200 is being finalized,” Huang said. “I’m hoping ... the Chinese government would allow Nvidia to sell [the] H200, so they have to decide, and I’m looking forward to a favorable decision.”Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) founder Morris Chang (張忠謀) once said “globalization is dead” as the global trade development faced rising competition between the US and China, as well as the growing threats of protectionist measures worldwide.Tung yesterday said the recent developments do not herald the end of globalization, but rather that technology and trade have become increasingly shaped by geopolitics.With Taiwan’s technology sector caught in the middle of the US-China rivalry, the era of simply “making good products and doing business happily” is over, he said.Companies must navigate more cautiously in the increasingly complex environment and find the best path forward, he added.Trump’s recent decision to raise tariffs on South Korea to 25 percent from the previously agreed 15 percent reflects his governing style of frequently adjusting policy in a short period of time, he said.It was not only directed at South Korea, but served as a signal to other countries engaged in trade negotiations with Washington, he said. While demand for advanced chips used in servers and AI applications remains strong, Taiwan must proceed cautiously amid potential challenges, he added.Additional reporting by AFP