Taiwan dismisses the idea of moving 40% of the island’s semiconductor output to the U.S.—production in Taiwan is expected to rise alongside growth in U.S.-based manufacturing
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Taiwan’s authorities have dismissed demands from the U.S. Officials to move a significant share of semiconductor manufacturing to the U.S., arguing that relocating 40% of the island’s chip output is impractical, reports Reuters. The authorities anticipate firms such as TSMC and UMC to continue growing their manufacturing capacity on the island, despite TSMC now actively increasing its overseas operations and other nations pursuing the onshoring of Chip manufacturing.
Vice Premier Cheng Li-chiun said in an interview with Taiwanese television station CTS that she had explicitly informed the U.S. Government that Taiwan’s semiconductor ecosystem cannot be easily moved elsewhere. The semiconductor industry will keep growing within the country, while foreign investments—such as those TSMC undertakes in its U.S. Manufacturing capacity—will move forward only in tandem with ongoing domestic expansion.
According to Cheng, Taiwan’s total semiconductor capacity—encompassing both current fabs and upcoming projects—is projected to surpass the investments made in the United States or any other nation.
The remarks are a reaction to the latest statements by U.S. Commerce Secretary Howard Lutnick, who noted that centralizing a significant share of global semiconductor manufacturing near China posed a strategic risk. He also suggested that the objective of the U.S. The government aims to boost the nation’s share of the leading-edge semiconductor manufacturing market to 40% within three years, by the close of President Trump’s current term.
How that could be possible, considering it takes three years to construct a fab in the U.S. And roughly another year to scale it up, is something Lutnick did not reveal. Yet he cautioned that if these objectives are not met, tariffs on goods made in Taiwan could rise as high as 100%.
In earlier comments, Lutnick also outlined a situation where cutting-edge semiconductor manufacturing might be divided nearly equally between Taiwan and the United States, suggesting that the U.S. Government holds a relatively adaptable stance regarding actual market share figures.
By contrast, Taiwanese officials reaffirmed that there are no intentions to move the island’s science parks, which constitute the heart of its semiconductor manufacturing ecosystem and are vital components of the country's So-called silicon shield. Nevertheless, Taiwan’s authorities have no issue with TSMC growing abroad provided its most advanced technologies stay in Taiwan.
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If the local government continues to constantly meddle in TSMC, they’ll eventually lose that quadratic curve in revenue and possibly even lose node leadership, though that part is less likely. I mean Intel had to use TSMC N3 for their iGPU because it was more efficient than 18a and now N2 is in production.
The comments are a response to the recent statements by U.S. Commerce Secretary Howard Lutnick, who said that concentrating a large portion of global semiconductor production close to China represented a strategic vulnerability.
I recall people saying the same thing decades ago. However, the lesson that "the cheapest option isn't always the best option" has yet to be learned.
