Taiwan’s semiconductor industry remains firmly rooted on the island despite increasing pressure from the United States for a significant production shift. Taiwan’s Vice Premier Cheng Li-chiun stated it would be “impossible” to relocate 40 per cent of the island’s semiconductor capacity to the US, countering recent statements from American officials.
In a broadcast interview with Taiwanese television channel CTS, Cheng asserted that Taiwan’s semiconductor ecosystem, developed over decades, cannot simply be moved. “I have made it very clear to the United States that this is impossible,” she emphasised, referring to the US’s ambition for a major production shift.
Cheng pointed out that Taiwan’s semiconductor sector will not only continue to thrive domestically but will also look to expand its presence in the US. “Our overall capacity (in Taiwan) will only continue to grow,” she remarked. “But we can expand our presence in the United States.”
On Tuesday, US Commerce Secretary Howard Lutnick reiterated the government’s position, arguing the necessity of relocating semiconductor manufacturing away from proximity to China. “You can’t have all semiconductor manufacturing 80 miles from China,” he said, labelling the situation as “illogical”. Lutnick’s goal for the Biden administration is to achieve a 40 per cent market share in leading-edge semiconductor manufacturing within the US.
In a recent agreement, Taiwan and the US reached a consensus to reduce tariffs on Taiwanese exports from 20 per cent to 15 per cent, while Taiwan committed to increasing its investments in the US. Cheng assured that Taiwan’s science parks would not be relocated, but expressed willingness to share expertise in building an industry cluster to assist the US in developing a similar environment.
Cheng conveyed confidence that Taiwan’s semiconductor capacity—including current, under-construction, and planned projects across advanced manufacturing and packaging—would far exceed any investments made in the US or elsewhere. In a prior interview on CNBC, Lutnick indicated that his target is to bring 40 per cent of Taiwan’s complete chip supply chain and production to the US, warning that failure to achieve this goal could result in tariffs on Taiwan rising to 100 per cent.
The dialogue between the two nations has been ongoing, with Lutnick previously suggesting a 50-50 split in chip production, a proposal that Taiwan rejected. Meanwhile, TSMC, the world’s largest contract chipmaker, is investing a staggering $165 billion to establish factories in Arizona, signalling Taiwan’s commitment to maintaining its semiconductor leadership while expanding its international footprint.
