Russia’s war in Ukraine spurs firms in Taiwan to ‘derisk’ amid China tensions

Foreign investment approved by Taiwanese regulators hit a 15-year high of US$13.3 billion in 2022, especially in areas like chip making and offshore wind

But Russia’s invasion of Ukraine has forced multinationals to consider more closely their presence in Taiwan amid heightened tensions with mainland China

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Russia’s invasion of Ukraine has forced multinationals to consider more closely their presence in Taiwan, experts say. Photo: DPA

Published: 2:30pm, 24 Feb 2023

Russia’s invasion of Ukraine in February 2022 has led to tens of thousands of deaths on both sides and created Europe’s largest refugee wave since World War II. In this multimedia series marking the one-year anniversary of the conflict, we look at China’s response to what Russian President Vladimir Putin called a “special military operation” and its diplomatic, military, monetary and economic impact.

Growth in major industries during the coronavirus pandemic bolstered investment in Taiwan, but the perceived risk of a military attack by mainland China is making some companies rethink their long-term positions, especially in light of the Ukraine war.

The global semiconductor buying spree of 2020-22 brought multinational tech companies closer to Taiwan’s chipmaking giants in areas of research and development, production equipment and raw materials. Taiwan supplies about 60 per cent of the world’s semiconductors.

Aggressive development of offshore wind power in Taiwan has also attracted investment, particularly from Western companies.

But against a backdrop of war in Ukraine and heightened tensions in the Taiwan Strait, investors are slowly re-evaluating their exposure to the island in case it falls into conflict with mainland China or is blockaded by the People’s Liberation Army in ways that threaten business, analysts and company operators say.

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Investor confidence was rocked in August last year after a visit to Taipei by former US House Speaker Nancy Pelosi triggered unprecedented Chinese military exercises that encircled the island for around a week.

SCMP Series

Impact of the Ukraine war, 1 year on

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