Taiwan Rejects Proposal to Produce Half of Its Semiconductors in the U.S.

Key Takeaways

Taiwan will not agree to a proposal for a 50-50 split in semiconductor production with the United States.
Vice Premier Cheng Li-chiun emphasized that the proposal was solely from the US and not discussed by Taiwan’s negotiating team.
Ongoing tariff negotiations between Taiwan and the US have seen some progress amidst concerns over potential US tariffs on Taiwanese semiconductors.

Taiwan’s Stance on Semiconductor Production

Taiwan’s lead tariff negotiator, Vice Premier Cheng Li-chiun, has firmly stated that the island will not agree to producing 50 percent of its semiconductors in the United States. Cheng’s remarks followed US Secretary of Commerce Howard Lutnick’s proposal for a 50-50 split in chip production.

Cheng clarified that this proposal originated from the US and that Taiwan’s negotiation team had never made a commitment to such a production split. “Please be rest assured that we did not discuss this issue this time, and we will not agree to such a condition,” she told reporters in Taipei. This statement underscores Taiwan’s determination to maintain its autonomy over high-tech production without succumbing to external pressures.

Cheng made her comments after a recent visit to Washington, where negotiations about US tariffs on Taiwanese shipments reportedly made some progress. Taiwan faces challenges in finalizing a tariff deal as the Trump administration previously imposed a temporary 20 percent tariff that raised concerns among Taiwanese manufacturers. Additionally, Trump has indicated that he may impose a “fairly substantial tariff” on semiconductors imported into the United States.

The ongoing tensions are exacerbated by soaring demand for AI-related technology, which has resulted in increased trade surplus for Taiwan with the United States. According to Taiwan’s cabinet, over 70 percent of its exports to the US comprise information and communications technology, including semiconductors, making the island a critical player in the supply chain.

In light of these developments, Taiwan’s firm stance on semiconductor production reflects its strategic importance and willingness to assert its interests in the face of external pressures.

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