The US dominance in the global semiconductor industry has shown a mirror to the small country of Taiwan. Taiwan has made it clear that we will not accept this US proposal, which said that Taiwan should shift 50% of its semiconductor production to American soil. Taiwan’s Deputy Prime Minister Cheng Li-chun made this statement on Wednesday. Cheng Li-chun is also Taiwan’s chief tariff negotiator.
Cheng made it clear that ‘the idea of a 50-50 chip production split is only the US’s and Taiwan has never made any commitment in this direction. I want to make it clear that this is the US’s idea. Our negotiating team has never agreed to anything like this. Please rest assured, we have not discussed this issue and will not accept any such conditions.’
Cheng recently returned from Washington, where he held talks on US tariffs. He said there had been some progress in the talks, but no final agreement had been reached. US President Donald Trump’s administration has temporarily imposed a 20% tariff on semiconductors from Taiwan. The move has raised concerns among Taiwan’s industry. Trump has also warned that we are considering imposing a large tariff on semiconductors.
In recent months, there has been a huge surge in demand for artificial intelligence (AI) technology. This has led to a widening trade deficit between Taiwan and the US. According to US data, more than 70% of Taiwan’s exports to the US are related to the information and communications technology (ICT) sector, which includes chips. To reduce this pressure, Taiwan has pledged to invest more in the US, buy more US energy and increase its defence spending to more than three percent of GDP.
Taiwan currently produces more than 50 percent of the world’s semiconductors, including nearly all of the high-tech chips it produces. It has long been considered Taiwan’s “silicon shield.” It is a strategic shield that compels the United States to be involved in Taiwan’s defense in the event of an invasion or blockade by China.
US Commerce Secretary Howard Lutnick recently said in an interview that “50 percent of Taiwan’s chip production should be done in the United States.” He reasoned that if we ever need to, we should have the ability to produce it ourselves. Our goal is to produce at least 40 to 50 percent of the chips for American consumption. He also warned that if Taiwan does not agree to this “50-50” plan, American security assistance against a possible Chinese invasion could be affected.
