Impossible to Shift 40% of Our Chip Capacity to US: Taiwan
The global semiconductor industry has been abuzz with the recent announcement by Taiwan’s Vice Premier, Cheng Li-chiun, that shifting 40% of the country’s chip capacity to the US is “impossible”. This statement comes amidst growing pressure from the US government on Taiwanese chip firms to relocate their manufacturing facilities to the United States. In a recent interview, Vice Premier Cheng Li-chiun emphasized that while Taiwan’s overall semiconductor capacity will continue to grow, it is not feasible to transfer a significant portion of it to the US.
The US government has been keen on encouraging Taiwanese chip firms to set up manufacturing facilities in the US, citing national security concerns and the need to reduce dependence on foreign suppliers. However, Taiwanese officials have been hesitant to comply with these demands, citing the significant costs and logistical challenges involved in relocating their operations. According to Vice Premier Cheng Li-chiun, “Our overall capacity [in Taiwan] will continue to grow. But we can expand our presence in the US.” This statement suggests that while Taiwan is open to expanding its presence in the US, it is not willing to compromise on its existing manufacturing capabilities.
The issue of chip production has become a contentious one in recent months, with the US government imposing strict regulations on the export of advanced semiconductor technology to China. The US Commerce Secretary, Howard Lutnick, recently warned Taiwanese chip firms that they could face a 100% tariff if they fail to build manufacturing facilities in the US. This move is seen as an attempt to coerce Taiwanese firms into relocating their operations to the US, in order to reduce the country’s dependence on foreign suppliers.
However, Taiwanese officials have pushed back against these demands, arguing that the US government’s expectations are unrealistic. The process of relocating a significant portion of Taiwan’s chip capacity to the US would require significant investments in infrastructure, talent, and technology. Moreover, it would also require Taiwanese firms to navigate complex regulatory frameworks and establish new supply chains. Given these challenges, it is unlikely that Taiwanese chip firms would be able to meet the US government’s demands in the near future.
The implications of this development are far-reaching, with significant consequences for the global semiconductor industry. The US government’s efforts to encourage Taiwanese chip firms to relocate their operations to the US are part of a broader strategy to reduce the country’s dependence on foreign suppliers. However, this approach has been criticized for being overly protectionist and potentially detrimental to the global economy. By imposing tariffs and other trade restrictions, the US government may inadvertently create trade barriers that harm the very industry it is trying to protect.
Moreover, the US government’s demands on Taiwanese chip firms have also raised concerns about the potential impact on the global supply chain. The semiconductor industry is a complex and interconnected one, with firms relying on each other for components, technology, and expertise. By disrupting this supply chain, the US government’s actions could have unintended consequences, such as delays, cost increases, and reduced innovation.
In conclusion, Taiwan’s Vice Premier Cheng Li-chiun’s statement that shifting 40% of the country’s chip capacity to the US is “impossible” highlights the significant challenges involved in relocating semiconductor manufacturing facilities. While the US government’s efforts to encourage Taiwanese chip firms to set up operations in the US are understandable, they must also take into account the complexities and realities of the industry. Rather than imposing tariffs and trade restrictions, the US government should focus on creating a more favorable business environment that encourages investment, innovation, and collaboration.
As the global semiconductor industry continues to evolve, it is essential that governments and firms work together to create a more sustainable and resilient supply chain. This requires a nuanced understanding of the industry’s complexities and a willingness to collaborate on solutions that benefit all parties involved. By doing so, we can ensure that the semiconductor industry continues to thrive and drive innovation, while also addressing the concerns of governments and firms around the world.
News Source: https://www.reuters.com/world/china/taiwan-says-40-shift-chip-capacity-us-is-impossible-2026-02-09/
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