Taiwan should pay the U.S. for its defence as it does not give the country anything, Republican presidential candidate Donald Trump told Bloomberg Businessweek, sending shares of Taiwanese chip manufacturer TSMC down 3% in premarket trading Wednesday.
"I know the people very well, respect them greatly. They did take about 100% of our chip business. I think, Taiwan should pay us for defence," Trump said in interview on June 25 that was published on Tuesday.
"You know, we're no different than an insurance company. Taiwan doesn't give us anything."
TSMC is the dominant maker of advanced chips used in everything from AI applications to smartphones and fighter jets, and analysts believe any conflict over Taiwan would decimate the world economy.
There was no immediate reaction from TSMC which is currently in its quiet period ahead of its second quarter earnings report on Thursday.
"Trump's comments were plainly blunt. We see it as political rhetoric," said Allen Huang, a vice president at Mega International Investment Service. "TSMC is an excellent company, and it has won out in the market over many rival companies in the United States."
TSMC is spending billions building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it says most manufacturing will remain in Taiwan.
