Key Takeaways
- Taiwan’s top trade negotiator has publicly stated the country never discussed and would not accept a 50-50 chip production split with the U.S.
- The proposal stems from the Trump administration’s goal to reduce reliance on Taiwan, which currently produces the vast majority of advanced chips.
- The idea has been met with strong opposition in Taiwan, with lawmakers calling it a form of U.S. exploitation that would weaken the island’s strategic position.
- While TSMC is investing $165 billion in Arizona, it maintains that the bulk of its advanced manufacturing will remain in Taiwan.
Taiwan has firmly pushed back against a U.S. proposal to divide semiconductor production equally, a development that signals rising tensions in trade talks. The proposal is a cornerstone of the Trump administration’s strategy to reduce America’s heavy reliance on Taiwanese chip manufacturing for its economic and national security.
Photo: I-Hwa Cheng, AFP
Upon returning from recent negotiations, Taiwan’s Vice Premier Cheng Li-chiun, the nation’s chief tariff negotiator, made the country’s position clear. “Our negotiation team has never pledged to a 50-50 distribution of chips,” she stated, adding, “nor would we accept such terms.”
The rejection follows comments from U.S. Commerce Secretary Howard Lutnick, who outlined a plan to have the U.S. produce roughly 40 percent of its own semiconductors by the end of Trump’s term. Lutnick argued that having “95 percent of our chips made 9,000 miles away” is an unacceptable risk, particularly given China’s proximity and claims over Taiwan.
The proposal has been met with significant backlash in Taiwan, where it is viewed by many as an attempt at exploitation. Opposition lawmakers argue that forcing Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading chipmaker, to move its most advanced production would undermine the island’s famed “Silicon Shield” and weaken its global bargaining power.
Despite the diplomatic friction, TSMC is proceeding with a massive $165 billion investment in Arizona, where it has already begun high-volume production. However, the company has consistently stated that while its U.S. presence will grow to include its most advanced 2-nanometer chips, the majority of its manufacturing capacity will remain firmly planted in Taiwan.
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