Taiwan Pushes Back on U.S., Citing 40% Goal ‘Impossible’

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Taiwan has pushed back strongly against U.S. calls to shift a large share of its semiconductor manufacturing capacity to American soil, saying such a move is unrealistic and would undermine an ecosystem built over decades, according to a recent Reuters news article.

In an interview aired on Taiwanese television channel CTS, Vice Premier Cheng Li-chiun said it would be “impossible” to relocate 40% of Taiwan’s chipmaking capacity to the United States, responding to recent statements by senior U.S. officials advocating for a major production shift.

According to Reuters, Cheng emphasized that Taiwan’s semiconductor ecosystem, spanning advanced manufacturing, packaging, and the broader supply chain, cannot simply be moved overseas. “Our overall capacity (in Taiwan) will only continue to grow,” she said in the article. “But we can expand our presence in the United States.” Cheng added that overseas expansion would not come at the expense of Taiwan’s domestic base and that they will “remain firmly rooted in Taiwan and continue to expand investment at home.”

The remarks follow those of U.S. Commerce Secretary Howard Lutnick, who has argued that the concentration of semiconductor manufacturing near China poses strategic risks. “You can’t have all semiconductor manufacturing 80 miles from China,” Lutnick said in the Reuters article. “That’s just illogical … So we need to bring it back,” adding that the administration’s goal is to achieve “40% market share in leading-edge semiconductor manufacturing” by the time it leaves office. Earlier proposals for a 50-50 production split were rejected by Taipei.

While Taiwan recently agreed with Washington to reduce tariffs on its exports to 15% from 20% and to increase U.S. investment, Cheng said there would be no relocation of Taiwan’s science parks. Instead, Taiwan is willing to share its experience in building semiconductor industry clusters to help the U.S. develop its own. Reuters said the U.S. has threatened to impose higher tariffs if it does not get what it wants.

TSMC, the world’s largest contract chipmaker, is already investing $165 billion in new fabs in Arizona, highlighting Taiwan’s willingness to expand abroad, while keeping its semiconductor core firmly at home.