Taiwan has firmly rejected U.S. calls to move a large share of its semiconductor production to American soil, saying such a shift would be unworkable and would undermine an industry ecosystem built over decades.
The response comes amid intensifying bilateral discussions on trade, investment, and supply chain resilience, with semiconductors at the center of strategic and economic considerations.
Speaking in a televised interview broadcast late on Feb 8, Taiwan Vice Premier and chief trade negotiator Cheng Li-chiun said proposals to transfer 40% or more of Taiwan’s chipmaking capacity to the United States were unrealistic.
With regard to “40 or 50 per cent of production capacity (being) moved to the United States... I have made it very clear to the US side that this is impossible,” she said.
Cheng emphasized that Taiwan’s semiconductor sector depends on a deeply integrated industrial ecosystem that cannot simply be moved overseas.
She said the industry’s foundation, encompassing advanced manufacturing, packaging, and supply chains, would continue expanding in Taiwan.
While rejecting relocation, Cheng said Taiwan remains open to sharing its experience in building industrial clusters and to expanding overseas investment.
“Our overall capacity (in Taiwan) will only continue to grow,” she said.
“But we can expand our presence in the United States.”
She added that any international expansion would be based on maintaining and increasing investment at home.
U.S. officials have repeatedly argued that concentrating semiconductor manufacturing in Taiwan poses strategic risks.
On Tuesday, U.S. Commerce Secretary Howard Lutnick said, “You can't have all semiconductor manufacturing 80 miles from China.”
“That’s just illogical ... So we need to bring it back.”
Lutnick has said the administration’s goal is to secure a 40% share of leading-edge semiconductor manufacturing in the United States.
He has also warned in previous interviews that tariffs on Taiwan could rise sharply, potentially to 100%, if such shifts do not occur.
These remarks follow a January agreement under which the United States lowered tariffs on Taiwanese goods to 15% from 20%, while Taiwan agreed to increase investment in the U.S.
TSMC, the world’s largest contract chipmaker, is investing $165 billion in new facilities in Arizona, highlighting Taiwan’s willingness to expand abroad without relocating its core capacity.