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Trade facilitation in Taiwan semiconductor industry leads to inventory accumulation risks.
The article explores how trade facilitation and geopolitical factors impact Taiwan's semiconductor companies. By analyzing data from 52 integrated circuit companies, the researchers found that trade facilitation leads to increased inventory in the semiconductor industry, contrary to other sectors. This is mainly due to market size expansion. Geopolitical risks intensify this effect, causing even more inventory accumulation. To stay competitive, semiconductor companies in Taiwan should invest more in manufacturing in China and manage cross-strait relations carefully.
