Impossible to shift 40% of our chip capacity to US: Taiwan
The global semiconductor industry has been abuzz with the recent developments in the US-Taiwan trade relations. In a significant statement, Taiwan’s Vice Premier Cheng Li-chiun has asserted that shifting 40% of the country’s semiconductor capacity to the US is “impossible”. This statement comes amidst the growing pressure from the US on Taiwanese chip firms to relocate their manufacturing facilities to the American soil.
The US has been keen on bolstering its domestic semiconductor industry, and has been urging Taiwanese firms to invest in the US. However, Taiwan’s Vice Premier has made it clear that such a massive shift in capacity is not feasible. “Our overall capacity [in Taiwan] will…continue to grow. But we can expand our presence in the US,” she added, indicating that while Taiwan is open to expanding its presence in the US, it is not willing to compromise on its domestic capacity.
The backdrop to this development is the warning issued by US Commerce Secretary Howard Lutnick, who stated that Taiwanese chip firms could face a 100% tariff if they fail to build in the US. This threat has been seen as an attempt by the US to coerce Taiwanese firms into relocating their manufacturing facilities to the US. However, Taiwan’s Vice Premier has made it clear that such threats will not dictate Taiwan’s semiconductor policy.
The Taiwanese semiconductor industry is a significant player in the global market, with firms like Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) being among the leading manufacturers of chips. Taiwan’s semiconductor industry is a critical component of the country’s economy, and the government is keen on protecting and promoting the interests of its domestic industry.
The US has been seeking to reduce its dependence on Asian semiconductor manufacturers, particularly in the wake of the COVID-19 pandemic, which highlighted the vulnerabilities of global supply chains. The US government has been actively promoting the development of its domestic semiconductor industry, with initiatives like the CHIPS Act, which provides incentives for firms to invest in US-based manufacturing facilities.
However, Taiwan’s Vice Premier has made it clear that the country’s semiconductor industry will continue to grow and thrive, with or without the US. “We will continue to invest in research and development, and we will continue to expand our capacity in Taiwan,” she said. This statement reflects the confidence of the Taiwanese government in its domestic industry, and its determination to protect and promote the interests of its semiconductor firms.
The implications of this development are significant, not just for the US-Taiwan trade relations, but also for the global semiconductor industry. The US will have to reassess its strategy for promoting its domestic semiconductor industry, and consider alternative approaches that take into account the concerns and interests of Taiwanese firms.
In conclusion, Taiwan’s Vice Premier has made it clear that shifting 40% of the country’s semiconductor capacity to the US is “impossible”. While Taiwan is open to expanding its presence in the US, it is not willing to compromise on its domestic capacity. The US will have to consider alternative approaches to promote its domestic semiconductor industry, and work with Taiwanese firms to find mutually beneficial solutions.
As the global semiconductor industry continues to evolve, it will be interesting to see how the US-Taiwan trade relations unfold. One thing is certain, however – Taiwan’s semiconductor industry will continue to play a critical role in the global market, and its interests will have to be taken into account by the US and other countries seeking to promote their domestic industries.
Source: https://www.reuters.com/world/china/taiwan-says-40-shift-chip-capacity-us-is-impossible-2026-02-09/
About the Author
