FILE PHOTO: Mediatek Chief Executive Officer Rick Tsai talks to reporters following an award ceremony in Taipei, Taiwan November 18, 2020. REUTERS/Ann Wang/File Photo
TAIPEI (Reuters) - The chief executive of Taiwan's top chip design company MediaTek said on Friday that the company has been running simulations for possible U.S. tariffs on the island, but thinks for this year it would be "manageable".
Tech firms in Taiwan, home to the world's largest contract chipmaker TSMC, face the possibility U.S. President Donald Trump will follow through on threats to put tariffs on imported chips, having complained on the campaign trail about Taiwan having stolen American semiconductor business.
Trump said last week he plans to impose tariffs on imported chips, along with pharmaceuticals and steel, in an effort to get the producers to make them in the United States. He has not given a timeframe.
Asked on a quarterly earnings conference call about the impact on the company, whose partners and clients include artificial intelligence (AI) darling Nvidia, from any future U.S. tariffs on Taiwan, MediaTek's CEO Rick Tsai said the issue was "very unpredictable".
"Of course we're not just sitting here doing nothing. We are making our own assumptions, doing some simulations," he said, without giving details.
For this year, Tsai said the impact would be "manageable".
"You can define manageable by many different ways, but from my end I think it's manageable for us for 2025," he added. "There are so many variables, so it's very difficult to give an accurate estimate now. It's very complex."
The tech industry also faces unpredictability from Chinese startup's DeepSeek AI.
Tech stocks worldwide plunged on Jan. 27 after the launch of DeepSeek AI - apparently costing a fraction of rival models and requiring less sophisticated chips - raised questions over the West's huge investments in chipmakers and data centres.
But Tsai said he remained very positive on the AI market.
"With the recent DeepSeek phenomenon we actually are getting more optimistic," he said. "The trend is democratising AI. It will spread more for average users."
MediaTek's shares have risen 7.8% so far this year, outperforming the broader market's 1.9% gain. The company's shares closed flat on Friday.
(Reporting by Ben Blanchard; Editing by Kim Coghill)
