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Taiwan Tensions and 3D Printing

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Charles R. Goulding and Preeti Sulibhavi look at how 3D printing may be affected by the current Taiwan situation.

One of the biggest geopolitical threats of our time is China’s aggressive stance on Taiwan. Biden has signaled US support for the island nation and underscored their support for Taiwan. The administration has committed to providing Taiwan with the capabilities it needs to defend itself and would like to see Taiwan play a greater role around the world.

Tensions appear to be rising again with the landslide defeat of Ma’s Nationalist party in 2016, which upended plans for reconciliation and brought to power, Tsai Ing-wen of the Democratic Progressive Party (its principles founded on the promise of “One China”).

Taiwan is home to leading electronics and textile manufacturers. In fact, unlike mainland China, Taiwan is known for its specialized intermediate goods as opposed to direct consumer goods. An average of 78.5 percent of Taiwan’s exports from 2006-2012 were intermediate goods, while only 20.3 percent were consumer goods. In comparison, intermediate goods only composed around 42 percent of mainland China’s total exports in 2014. Many of Taiwan’s intermediate goods include electronic components, machinery and machine tooling equipment.

Supply Chain Issues and 3D Printing

With the inevitable supply chain disruption looming ahead, an opportunity for 3D printing to fill the gap becomes apparent. We have already written about how 3D printing can help win the semiconductor race as well as how the 3D printing industry can advance the AI and machine learning sectors. While it is not a novel concept to introduce 3D printing into these industries, it is becoming evident that it is necessary now, more than ever.

We have written about similar tensions between Hong Kong and China in a previous article.

The Research & Development Tax Credit

The now permanent Research and Development (R&D) Tax Credit is available for companies developing new or improved products, processes and/or software.

3D printing can help boost a company’s R&D Tax Credits. Wages for technical employees creating, testing and revising 3D printed prototypes can be included as a percentage of eligible time spent for the R&D Tax Credit. Similarly, when used as a method of improving a process, time spent integrating 3D printing hardware and software counts as an eligible activity. Lastly, when used for modeling and preproduction, the costs of filaments consumed during the development process may also be recovered.

Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.

Conclusion

The geopolitical situation between Taiwan and China has longstanding issues that can impact a myriad of industries and cause supply chain issues. The 3D printing industry should not ignore this but instead should see this as an opportunity to step in and fill the supply chain gaps.

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