Taiwan rejects US demand to shift semiconductor capacity

Taiwan has rejected U.S. demands to relocate a significant portion of its semiconductor manufacturing to American territory. As reported by Reuters, the government in Taipei argues that the island's deeply integrated semiconductor ecosystem, built up over decades, cannot simply be moved. In an interview, Vice Premier Cheng Li-chiun stated it is "impossible" to shift 40 percent of Taiwan's semiconductor capacity to the U.S.—a goal recently raised by senior U.S. officials. She emphasized that while Taiwan's industry can expand internationally and increase its U.S. presence, this must occur alongside growing investments in the domestic market, with the industrial base firmly anchored in Taiwan. Cheng also expressed confidence that Taiwan's total semiconductor capacity will far exceed investments in the U.S. or other countries. These statements come as Washington pushes to expand domestic chip production, citing supply chain resilience and geopolitical risks. U.S. Commerce Secretary Howard Lutnick argued that global chip manufacturing must not remain heavily concentrated near China, with the U.S. aiming to secure 40 percent of leading-edge semiconductor production on its soil by the end of the current administration. Industry analysts note the global supply chain remains highly concentrated, with Taiwan playing a central role in wafer fabrication and packaging, and they highlight the structural hurdles and potential bottlenecks involved in relocating such complex, multi-country production networks