Here are the full details about Taiwan rejecting the U.S. proposal to make 50-50 semiconductor production split between Taiwan and the U.S.: what was proposed, Taiwan’s response, and what it means.
🔍 What Was Proposed by the U.S.
- U.S. Commerce Secretary Howard Lutnick recently said the U.S. administration aims to have half of global semiconductor chip production located on U.S. soil. The idea is part of a broader strategy for supply-chain resilience and reducing reliance on overseas sources, especially Taiwan.
- The proposal would require a big shift of production capacity (especially from leading manufacturers in Taiwan) to the U.S. to achieve this 50-50 split.
🛑 Taiwan’s Response
- Taiwan’s Vice Premier Cheng Li-chiun (also leading tariff negotiations with the U.S.) said Taiwan has never agreed to such a “50-50 split” during any negotiations. She clarified that no such condition was accepted, nor would Taiwan agree to these terms.
- Taiwan’s government emphasized that this figure was not part of the discussions and they reject making production share a demand.
⚙️ Context / Why the Proposal Came Up
- The U.S. is concerned about its overdependence on Taiwanese semiconductor production, especially for advanced chips. Taiwan (led by TSMC) currently dominates much of global advanced semiconductor fabrication.
- Geopolitics: supply chain resilience and national security concerns are prompting the U.S. to push for more onshore production.
- Investment trends: Companies like TSMC have already committed large sums to build factories in the U.S. (e.g. ~$165 billion in U.S. semiconductor manufacturing) driven by demand. But this is different from agreeing to produce half of global output in the U.S.
🔍 Implications & What It Means
| Aspect | Implication |
|---|---|
| Sovereignty & Strategic Positioning | Taiwan sees its semiconductor industry as a major strategic asset (“silicon shield”) that gives it economic leverage & security. Surrendering control or shifting too much production could erode that. |
| Economic Cost | Shifting production entails high costs (infrastructure, skilled labor, supply chains). Taiwan doesn’t want to agree to terms that might weaken its domestic industry or lead to job losses. |
| International Relations | This disagreement could create friction in U.S.-Taiwan trade/tariff negotiations. It may also influence how Taiwan positions itself vis-à-vis China & other allies. |
| Supply Chain Stability | For the U.S., pushing too hard to relocate could create disruptions (because of the complexity of semiconductor ecosystems: equipment, talent, materials). For Taiwan, the demand may create pressure but also opportunity (investment, Alt fab sites). |
| Tech Transfer & IP Considerations | Part of the concern is how much of Taiwan’s advanced technology (R&D, process nodes, talent) would move/transfer. Taiwan likely wants to retain those in-house. |
❓ What Is Still Unclear
- Whether the U.S. is formally making 50-50 a condition in trade or subsidy negotiations, or simply stating it as a goal/aspiration. Taiwan’s statements suggest the latter (that it was suggested by the U.S.), but not that Taiwan accepted it.
- Details of how such a split would be achieved: which fabs, what nodes, who bears cost, what incentives, what limits.
- What protections Taiwan expects in return: Guarantee of security, commitments from U.S., provisions for intellectual property, etc.
- How this negotiation will affect U.S. tariffs, tax incentives, or legislation (like Chips Act, import controls).
✅ Bottom Line
- Taiwan has rejected the idea of being forced (or agreeing) to relocate half of chip production to the U.S. as part of any deal.
- The U.S. proposal reflects strategic concerns over supply chain reliance, but doesn’t yet appear to be formalized in Taiwan’s view.
- There is ongoing investment and cooperation (e.g., TSMC’s huge U.S. expansion), but a hard “half of everything” demand is seen by Taiwan as unacceptable.
