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Economics minister concerned about Korean war possibility (update)

2013/04/10 15:21:33

Taipei, April 10 (CNA) Minister of Economic Affairs Chang Chia-juch expressed concern Wednesday about the impact on Taiwan of war on the Korean peninsula.

"I think any regional wars or turbulence will not be good for the economy," Chang said when answering reporters' questions on the sidelines of the opening ceremony of four trade shows for motor vehicles and auto parts in Taipei.

While it will not be difficult to make some adjustments to Taiwan's supply chains if war breaks out, the proposed adjustments are basically near-term plans, which means that Taiwan's economy could still be negatively affected in the long term, Chang said.

"We will not be pleased to see it (Korean war) happen," he said, noting that the Ministry of Economic Affairs has offered suggestions for adjustments to individual local industry sectors.

The minister's response came amid media speculation over whether a second Korean war will break out, especially after Japanese media reported that North Korea had informed some diplomats that it would fire missiles toward the Sea of Japan Wednesday.

President Ma Ying-jeou has urged North Korea to exercise self-restraint and refrain from taking any action that could jeopardize regional peace and stability.

Arthur Chiao, chairman of the Taiwan Electrical and Electronic Manufacturers Association, said on the sidelines of the ceremony that Taiwan’s dynamic random access memory (DRAM) sector is unlikely to be jolted by the Korean tension.

"Taiwan’s DRAM production capacity is in a fixed range and is unlikely to change in the near term,” said Chiao, who also serves as chairman of Taiwanese memory chip maker Winbond Electronics Corp.

"The condition of supply and demand has become more stabilized, and I don’t think the local industry will be greatly affected if war breaks out,” he went on, adding that it remains too early to talk about whether Taiwan’s DRAM players will benefit from the possible transfer of orders.

According to local media reports, Taiwan's technology sector will benefit from the tension on the Korean peninsula caused by North Korea's saber-rattling.

China's second- and third-tier mobile phone makers have placed mobile DRAM orders with Taiwan's Winbond, as they are worried that South Korean memory chip giants Samsung and SK Hynix will slash or completely cut memory chip supplies to them in the event of war, the reports said.

(By Jeffrey Wu)