trade turbulence: will asia's semiconductor giants weather the storm?

2025-06-03 general

taipei, Tuesday, 3 June 2025.
mounting global trade barriers are casting a shadow over the semiconductor industry, threatening asian manufacturing powerhouses like tsmc. tariffs and restrictions could disrupt supply chains, inflate production costs, and cause delays. the airline industry is already feeling the pinch, with delivery delays 26% worse than promised. tsmc’s stock (tsm) could be vulnerable. investors should monitor trade policy closely as these developments could impact the semiconductor industry.

broader market downturn

Hong Kong’s stock market experienced a significant downturn amid rising concerns over global trade friction [3]. The Hang Seng Index fell by 2.20%, closing at 22,778.45 points [3]. The Tech Index decreased by 2.43% to 5,044.54 points, while the Enterprise Index dropped 2.55% to 8,217.06 points [3]. These declines reflect investor apprehension regarding the potential impact of trade tensions on various sectors, including technology and semiconductors [3].

semiconductor sector hit hard

The semiconductor sector mirrored the broader market’s negative sentiment. Several key players experienced notable declines [3]. Hua Hong Semiconductor fell by 6.02%, Solomon Systech decreased by 5.06%, and Semiconductor Manufacturing International Corporation (SMIC) dropped by 2.59% [3]. These declines highlight the sector’s vulnerability to trade-related uncertainties. Investors are wary of potential disruptions to supply chains and increased costs, which could negatively impact these companies’ profitability [3].

analyst insights on trade tensions

CICC (China International Capital Corporation) noted that escalating global trade friction poses a threat to internet technology companies reliant on overseas markets or supply chains [3]. They anticipate short-term valuation pressures and emphasize the need to monitor policy developments and corporate strategies [3]. JPMorgan analysts suggest that expanding tariffs to biopharmaceuticals or related equipment could create uncertainty for export-oriented pharmaceutical companies, leading to cautious market sentiment [3].

us-china trade war revives

The fragile trade truce between the United States and China is faltering, as both countries trade accusations of undermining the agreement [5]. The Chinese Ministry of Commerce stated that the U.S. has “unjustifiably accused” China of violating the consensus reached during trade talks in Geneva [5]. This escalation raises concerns about whether the two economic superpowers can achieve a lasting trade agreement within the 90-day timeframe initially set [5].

airlines feeling the turbulence

Growing trade barriers pose risks to the global economy, according to warnings from airlines [1]. The International Air Transport Association (IATA) anticipates global airlines will generate a combined profit of $36.0 billion in 2025 [1]. This forecast is a decrease from the $36.6 billion projected in December, though still an increase from the $32.4 billion recorded last year [1]. Extended delivery delays and supply bottlenecks are hampering airline growth [1].

raw material risks

The market for pneumatic titanium alloy valves faces risks from policy shifts, market competition, technological advancements, and supply chains [6]. Fluctuations in raw material prices, specifically titanium alloys and stainless steel, significantly impact profit margins [6]. These materials are susceptible to international metal market volatility [6]. Any surge in prices could squeeze company profits [6].

Bronnen

trade barriers semiconductor supply chain