Taiwan won’t make half of its chips in U.S.
The concentration of chip manufacturing in Taiwan has long been seen as a ‘silicon shield’ protecting it from an invasion or blockade by China.
TAIPEI (AFP) — Taiwan “will not agree” to making 50 percent of its semiconductors in the United States, the island’s lead tariff negotiator said Wednesday, as Washington pressures Taipei to produce more chips on US soil.
Vice Premier Cheng Li-chiun’s remarks came after US Secretary of Commerce Howard Lutnick said he had proposed to Taiwan a 50-50 split in chip production.
“I want to clarify that this is the US’ idea. Our negotiation team has never made a 50-50 commitment to a chip split,” Cheng told reporters in Taipei.
“Please be rest assured that we did not discuss this issue this time, and we will not agree to such a condition,” she said.
Cheng spoke after returning from Washington where she said negotiations over US tariffs on Taiwanese shipments “made some progress.”
Taiwan is struggling to finalize a tariff deal with Washington, after President Donald Trump’s administration imposed a temporary 20 percent levy that has alarmed the island’s manufacturers.
Trump has also threatened to put a “fairly substantial tariff” on semiconductors coming into the country.
Soaring demand for artificial intelligence-related technology has fuelled Taiwan’s trade surplus with the US — and put it in Trump’s crosshairs.
More than 70 percent of the island’s exports to the US are information and communications technology, which includes chips, the cabinet said in a statement Wednesday.
In a bid to avoid the tariffs, Taipei has pledged to increase investment in the US, buy more of its energy and increase its own defense spending to more than three percent of gross domestic product.
Taiwan produces more than half of the world’s semiconductors and nearly all of the high-end ones.
The concentration of chip manufacturing in Taiwan has long been seen as a “silicon shield” protecting it from an invasion or blockade by China, which claims it as part of its territory — and an incentive for the US to defend it.
In an interview with NewsNation broadcast over the weekend, Lutnick said having 50 percent of Taiwan’s chip production in the US would ensure “we have the capacity to do what we need to do if we need to do it.”