Taiwan pushes back on US calls to relocate semiconductor capacity
Taiwan has rejected US calls to shift a large share of its semiconductor manufacturing capacity to American soil, arguing that the island’s tightly integrated semiconductor ecosystem, which has been built up over decades, cannot be relocated, Reuters reported.
Speaking in an interview with Taiwanese broadcaster CTS, Vice Premier Cheng Li-chiun said it would be “impossible” to move 40% of Taiwan’s semiconductor capacity to the US, a target that has recently been raised by senior US officials, Reuters reported.
Cheng said she had conveyed Taiwan’s position directly to Washington. “I have made it very clear to the United States that this is impossible,” Cheng said.
Cheng added that Taiwan’s semiconductor industry would continue to expand domestically, but that the island can also expand its presence in the US.
"Our international expansion, including increased investment in the United States, is based on the premise that we remain firmly rooted in Taiwan and continue to expand investment at home," Cheng said.
She also said she was confident that Taiwan’s semiconductor capacity — including existing, under-construction and planned projects across advanced manufacturing, advanced packaging and the broader supply chain — would far exceed its investment in the US or any other country, Reuters reported.
The comments come as Washington continues to push for greater domestic semiconductor production, citing both supply-chain resilience and geopolitical risk. Reuters reported that US Commerce Secretary Howard Lutnick said in an interview with CNBC that semiconductor manufacturing could not remain heavily concentrated near China.
“You can’t have all semiconductor manufacturing 80 miles from China,” Lutnick said, adding that the administration’s goal was to secure a 40% share of leading-edge semiconductor manufacturing in the US before they leave office.
Analysts have noted that the global semiconductor supply chain remains highly concentrated in a handful of economies, with Taiwan playing a central role in wafer fabrication and packaging.
According to a briefing from GSIS (Global Security & Innovation Summit), the semiconductor supply chain involves over 50 countries across specialised stages, making full national reshoring virtually unfeasible without massive investment and years, many years, of coordination. On average, a single chip will directly involve 25 countries in the supply chain. This illustrates the structural challenges in relocating significant manufacturing capacity and highlights potential bottlenecks if supply chains are disrupted.
