Taiwan has flatly rejected a proposal from the United States to locally manufacture half of the semiconductor chips it currently supplies to America. The island’s top trade negotiator, Cheng Li-chiun, said the “50-50” split wasn’t even discussed during recent trade talks in the US.
The proposal came from US Commerce Secretary Howard Lutnick, who said his goal is to bring a significant amount of chip manufacturing back to the United States. “We need to make our own chips,” Lutnick said, explaining that currently, 95% of the US demand is met by chips made in Taiwan. “The idea that I pitched [Taiwan] was, let’s get to 50-50.”
The idea was not well-received in Taiwan. The chairman of the island’s main opposition party called it “an act of exploitation and plunder.” He said, “No one can sell out Taiwan or TSMC,” referring to the Taiwan Semiconductor Manufacturing Company, the world’s most advanced chipmaker.
Taiwan’s critical role in the global chip supply chain is so important that many believe it acts as a “Silicon Shield,” protecting the island from a potential military invasion by China. Lutnick downplayed this theory, arguing that a more balanced chip production between the two countries would actually make Taiwan safer.
However, for now, Taiwan has no intention of relinquishing its dominance in the chip industry. The country’s trade negotiator stated that the recent talks focused on lowering tariffs, rather than shifting production to the US.
