Taiwan has refused US requests to transfer significant semiconductor production operations to the United States, stating that it's impossible to move its semiconductor ecosystem.
Taiwan has positioned itself as a global leader in semiconductor manufacturing, a critical component of the global economy. Recently, the Biden administration expressed a desire for more technology production to occur within the United States, including a plan to relocate up to 40% of Taiwan's semiconductor supply chain and manufacturing capabilities. This came after the US agreed to reduce tariffs on Taiwanese goods from 20% to 15%, while Taiwan committed to increasing its investments in the US. US Commerce Secretary Howard Lutnick underscored that failure to achieve this transfer could result in significantly increased tariffs on Taiwanese products.
However, in a recent interview broadcasted on Taiwan's CTS channel, Vice Premier and chief negotiator Cheng Li-chiun firmly stated that Taiwan's semiconductor ecosystem would not be relocated to the US. She emphasized that transferring 40 or 50% of production capacity to the United States is simply not feasible. This declaration highlights the growing tension between the US aspirations for semiconductor independence and Taiwan's commitment to maintaining its established industry framework.
The implications of this situation are significant, as the semiconductor industry is critical not just for economic stability in Taiwan but for global technology supply chains. The US's push for more localized production stems from concerns over supply chain disruptions and geopolitical tensions, particularly related to China. Taiwan's decision to resist these demands could complicate US-Taiwan relations and also affect global semiconductor markets, as both regions grapple with issues of production, trade, and security.
