Taiwan Refuses US Request to Shift Semiconductor Manufacturing

Taiwan has rejected US demands to relocate semiconductor production so that half of American chip needs are produced domestically. The Trump administration has been pushing for this change amid ongoing trade negotiations, citing the US dependence on Taiwan for over 60 percent of global semiconductor production and around 90 percent of the world’s most advanced chips. US Commerce Secretary Howard Lutnick emphasized the goal of achieving 40 to 50 percent domestic chip production to enhance American self-sufficiency. Taiwan’s Vice Premier Cheng Li-chiun clarified that Taiwan has never agreed to a 50-50 manufacturing split and will not accept such terms. Washington has already imposed a 20 percent tariff on Taiwanese goods, with the possibility of increasing it to 100 percent for imported semiconductors if the 1:1 chip production rule is not followed. The strategic importance of Taiwan, located 80 miles from mainland China, and its key role in global chip supply adds urgency to the US effort. While TSMC plans to invest up to $165 billion in US semiconductor plants in Arizona, achieving 40 percent domestic production would require investments exceeding $500 billion. The US administration has also hinted at leveraging military support for Taiwan as part of trade negotiations, intensifying the geopolitical and economic tension between the two nations.