Taiwan to remain ‘firmly rooted’ despite US investment pressure

It would be “impossible” to move 40 per cent of Taiwan’s semiconductor capacity to the US, the island’s top tariff negotiator said, pushing back against recent comments by American officials who called for a major production shift.

In an interview with Taiwanese television channel CTS that was broadcast late on Sunday, Taiwan Vice Premier Cheng Li-chiun said she had made it clear to Washington that Taiwan’s semiconductor ecosystem, built up over decades, could not be relocated.

“I have made it very clear to the United States that this is impossible,” she said, referring to the 40 per cent goal the US has floated.

That ecosystem will continue to grow in Taiwan, Cheng said, adding that the semiconductor industry would keep investing at home.

“Our overall capacity (in Taiwan) will only continue to grow,” she said. “But we can expand our presence in the United States.”

“Our international expansion, including increased investment in the United States, is based on the premise that we remain firmly rooted in Taiwan and continue to expand investment at home.”

On Tuesday, US Commerce Secretary Howard Lutnick said the government needed to bring semiconductors to the US

“You can’t have all semiconductor manufacturing 80 miles from China,” he said. “That’s just illogical … So we need to bring it back.”

“When we leave office my goal, for this administration, is 40 per cent market share in leading-edge semiconductor manufacturing.”

Taiwan and the US reached a deal last month to lower tariffs on the island’s exports to 15 per cent from 20 per cent and for Taiwan to increase its investment in the country.

Cheng said that there would be no relocation of Taiwan’s science parks, but Taiwan was willing to share its experience in building an industry cluster and help the US develop a similar environment.

She also said she was confident that Taiwan’s semiconductor capacity – including existing, under construction and planned projects across advanced manufacturing, advanced packaging and the broader supply chain – would far exceed its investment in the US or any other country.

In an interview on CNBC last month, Lutnick said his goal was to bring 40 per cent of Taiwan’s entire chip supply chain and production to the US He said that if this does not happen, tariffs on Taiwan would likely rise to 100 per cent.

In September, Lutnick told US television network NewsNation that Washington’s pitch to Taiwan would be a 50-50 split in making chips, the vast majority of which are now made on the island.

Taiwan rejected that idea at the time.

TSMC (2330.TW), the world’s largest contract chipmaker, is investing $165 billion to build factories in the US state of Arizona.