US Commerce Sec. Raimondo warns on recession risk if chips from Taiwan cut off
US Commerce Secretary Gina Raimondo warned on Wednesday that the country’s current dependence on foreign computer chip fabrication from Taiwan puts it at risk of a recession if it’s ever cut off.
Key quotes
“While many computer chips are designed in the US by companies like Intel, the location of the manufacturing is just as important.”
“If you allow yourself to think about a scenario where the United States no longer had access to the chips currently being made in Taiwan, it’s a scary scenario,”
“It’s a deep and immediate recession. It’s an inability to protect ourselves by making military equipment. We need to make this in America. We need a manufacturing base that produces these chips, at least enough of these chips, here on our shores because otherwise we’ll just be too dependent on other countries.”
“The more than $50 billion CHIPS Act would help subsidize the creation of semiconductor manufacturing plants in the US.”
Market reaction
Risk sentiment remains in a weaker spot ahead of the key central banks’ policy announcements. The S&P 500 futures are down 0.20% on the day while the US dollar index drops 0.12% on the day to 106.95.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
