Key Points:
- Taiwan’s Vice Premier rejected the U.S. demand to move 40% of chip capacity.
- Officials say the island’s complex tech ecosystem cannot be easily relocated.
- U.S. Commerce Secretary Lutnick threatened high tariffs if goals aren’t met.
- TSMC is investing $165 billion in Arizona but keeping its main roots in Taiwan.
Taiwan’s top negotiator just drew a hard line in the sand regarding the global semiconductor race. Vice Premier Cheng Li-chiun stated clearly that moving 40% of the island’s chip manufacturing to the United States is simply “impossible.” Her comments came during a television interview broadcast late Sunday, pushing back against aggressive demands from American officials.
Cheng explained that Taiwan’s chip industry took decades to build. It is a complex ecosystem that cannot just be packed up and shipped across the ocean. While Taiwan is willing to help the U.S. grow its own tech sector, Cheng emphasized that the island’s overall capacity will continue to grow at home, not shrink. “I have made it very clear to the United States that this is impossible,” she said.
This response targets recent statements by U.S. Commerce Secretary Howard Lutnick. On Tuesday, Lutnick argued that having the vast majority of semiconductor manufacturing just 80 miles from China is “illogical” and dangerous. He set a strict goal for the current administration: securing 40% market share of leading-edge semiconductor manufacturing before leaving office.
The stakes are incredibly high. In a CNBC interview last month, Lutnick warned that if Taiwan does not move 40% of its supply chain to the U.S., tariffs on Taiwanese goods could skyrocket to 100%. Previously, the U.S. even suggested a 50-50 split in production, an idea Taiwan immediately rejected.
Despite the tension, the two sides reached a partial deal last month. The U.S. agreed to lower tariffs on Taiwan’s exports to 15% in exchange for increased investment. TSMC, the world’s biggest chipmaker, is already spending $165 billion to build factories in Arizona.
However, Cheng remains firm on the limits. She stated that while Taiwan will share its experience in building industry clusters, there will be no relocation of its science parks. She is confident that Taiwan’s domestic capacity—including advanced packaging and new construction—will always far exceed its investment in the U.S. or anywhere else.
