Taiwan rejects transfer of 40% of chip production to the USA

Taiwan’s vice prime minister said today that it is “impossible” to transfer 40% of the island’s semiconductor production to the United States, arguing that research and development of advanced technologies must continue to be carried out in Taiwan.

Cheng Li-chiun’s statements come after the US Secretary of Commerce, Howard Lutnick, indicated last month that President Donald Trump’s Administration intends to move around 40% of Taiwan’s semiconductor supply chain to the United States, following a trade agreement signed between Washington and Taipei.

“I clearly told the American side that this is impossible,” Cheng said on Sunday, during an interview with CTS television channel.

The minister highlighted that advanced chip manufacturing processes in Taiwan, essential for the development of artificial intelligence devices, represent around 90% of the value of global production. This dominance is the result of a semiconductor ecosystem built over decades and “cannot be transferred”.

Cheng stressed that, although it is not possible to “redistribute capacity”, there could be an expansion of the industrial presence in the United States. For bilateral cooperation in building the supply chain to be viable, the Taiwanese model must be adopted, something that, according to him, was welcomed by Washington.

The vice-prime minister also guaranteed that the existing science parks in Taiwan will have no equivalent in the United States, ensuring that the capacity of the Taiwanese industry for manufacturing and advanced packaging of ‘chips’ will be “much superior” to facilities in the United States or other countries.

“It is essential to first establish factories in Taiwan and confirm the viability of mass production. Only then will companies expand with new investments abroad”, defended Cheng, reiterating that technological innovation must continue to be carried out on Taiwanese soil.

Since his return to the White House, President Donald Trump has insisted on the need to “repatriate” semiconductor production to the US, which for years has depended on foreign manufacturers and vulnerable global supply chains.

However, analysts consider that replicating Taiwan’s production capacity will be a challenge, given the accumulated experience, the highly qualified workforce and the complete network of suppliers and logistics that support the high efficiency of the sector on the island.