Taiwan Says 40% Chip Relocation to U.S. ‘Impossible’

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Taipei: Taiwan has firmly pushed back against calls from the United States to move a substantial share of its semiconductor manufacturing capacity to American soil, with a senior official on Monday describing such a shift as “impossible.” The comments underscore Taipei’s determination to keep the core of its chip industry anchored at home even as both sides negotiate broader tech and trade issues.

In a televised interview, Vice Premier Cheng Li-chiun, who also serves as Taiwan’s chief tariff negotiator, said Taiwan conveyed to Washington that relocating 40% of its semiconductor production is not feasible due to the deeply entrenched ecosystem the island has built over decades. She stressed that while Taiwanese companies are willing to expand overseas, the heart of fabrication and research remains in Taiwan.

Taiwan’s semiconductor sector which accounts for a lion’s share of global foundry output and forms a central pillar of the island’s economy has attracted massive U.S. interest, with American officials citing national security reasons for encouraging relocation and diversification of supply lines. But Cheng reiterated that the Taiwanese industry’s complex infrastructure, supply networks and skilled workforce cannot simply be picked up and moved.

Taipei and Washington recently agreed on reducing tariffs on Taiwanese exports to the U.S., while also discussing increased investment by Taiwanese firms in American facilities. Taiwanese firms, including major contract manufacturers, have touted plans to grow their footprint abroad, notably in states such as Arizona.

Still, Cheng emphasized that such expansion is supplemental to not a replacement for Taiwan’s robust manufacturing base. “Our overall capacity in Taiwan will only continue to grow,” she said, noting that overseas investments are intended to support global operations but not to shift Taiwan’s competitive edge elsewhere.

U.S. Commerce Secretary Howard Lutnick has set ambitious goals for domestic chip production, including aiming for the United States to host 40% of global leading-edge semiconductor capacity. Washington officials have hinted that tariffs could increase significantly if global producers do not help boost U.S. output.