Taiwan has dismissed United States calls to shift 40% of its semiconductor manufacturing capacity to America, with the island’s top tariff negotiator describing such a move as “impossible” and reaffirming that the core of its chip industry will remain at home.
In an interview with Taiwanese television channel CTS broadcast late on Sunday, Vice Premier Cheng Li-chiun said she had made Taipei’s position clear to Washington amid growing pressure from American officials for a substantial relocation of production.
"I have made it very clear to the United States that this is impossible," she said, referring to the 40% goal floated by U.S. policymakers.
Cheng stressed that Taiwan’s semiconductor ecosystem, developed over decades and supported by tightly integrated science parks and supply chains, could not simply be transplanted overseas.
"Our overall capacity (in Taiwan) will only continue to grow," she said. "But we can expand our presence in the United States."
"Our international expansion, including increased investment in the United States, is based on the premise that we remain firmly rooted in Taiwan and continue to expand investment at home."
Her comments come after renewed calls from U.S. Commerce Secretary Howard Lutnick to significantly boost domestic semiconductor manufacturing.
Speaking on Tuesday, Lutnick argued that the concentration of advanced chip production in Taiwan posed strategic risks.
"You can't have all semiconductor manufacturing 80 miles from China," he said. "That's just illogical ... So we need to bring it back."
"When we leave office, my goal for this administration is 40% market share in leading-edge semiconductor manufacturing."
The remarks follow a trade agreement reached last month between Taiwan and the United States that reduced tariffs on Taiwanese exports to 15% from 20%, in exchange for increased Taiwanese investment in the U.S.
Cheng reiterated that there would be no relocation of Taiwan’s science parks, which form the backbone of its semiconductor cluster.
However, she said Taiwan was willing to share its expertise in building a comprehensive industry ecosystem and to assist the U.S. in developing similar clusters.
She added that Taiwan’s total semiconductor capacity - encompassing existing facilities, projects under construction and planned investments across advanced manufacturing, advanced packaging and the broader supply chain - would “far exceed” its investment footprint in the U.S. or any other country.
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, is already investing $165 billion to build fabrication plants in Arizona, marking one of the largest foreign direct investments in U.S. manufacturing.
