Taiwan Rejects US Call for 40% Chip Shift, Says Core Capacity Stays Home

Taiwan has firmly pushed back against recent calls from the United States to move a large share of its semiconductor production overseas, saying such a move is simply not realistic. Taiwan’s Vice Premier and top trade negotiator Cheng Li-chiun said it would be “impossible” to shift 40 per cent of the island’s chip manufacturing capacity to the US, as suggested by American officials. She explained that Taiwan’s semiconductor industry is the result of decades of investment, coordination, and ecosystem development, and cannot be relocated without weakening its foundations.

Speaking to Taiwanese television, Cheng said she had clearly conveyed this position to Washington. She stressed that Taiwan’s semiconductor ecosystem, including advanced manufacturing, packaging, and the wider supply chain, will continue to grow within the island. While Taiwan is open to expanding its global footprint, including investing more in the US, this will be done only while keeping its core firmly rooted at home.

The comments come after US Commerce Secretary Howard Lutnick said Washington wants to bring a large share of advanced chip manufacturing to the US for economic and strategic reasons. He has publicly stated a goal of achieving 40 per cent market share in leading-edge semiconductor production and warned that tariffs could rise sharply if this does not happen.

Taiwan and the US recently agreed to reduce tariffs on Taiwanese exports and increase Taiwanese investment in America. Cheng said Taiwan is willing to share its experience in building strong industry clusters to help the US develop its own ecosystem, but there will be no relocation of Taiwan’s science parks.

Meanwhile, Taiwan Semiconductor Manufacturing Company (TSMC) continues to invest overseas, including a $165 billion plan to build facilities in Arizona, even as Taiwan remains the global centre of its chip operations.

Source: The Economic Times