TAIPEI, Feb 9 (Reuters) – Taiwan’s top tariff negotiator said it was “impossible” to move 40% of the island’s semiconductor production capacity to the United States, rebutting recent calls from U.S. officials for major production shifts.
In an interview with Taiwanese television channel CTS on Sunday night, Taiwan’s Vice Prime Minister Cheng Li-qun said she had made it clear to Washington that the semiconductor ecosystem Taiwan has built over decades cannot be relocated.
“I have made it clear to the United States that this is not possible,” she said, referring to the 40% target proposed by the United States.
Taiwan’s ecosystem will continue to grow, Cheng said, adding that the semiconductor industry will continue to invest domestically.
“Our overall capacity (in Taiwan) will only continue to grow,” she said. “But we can expand our presence in the U.S.”
“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 inward investment.”
On Tuesday, U.S. Commerce Secretary Howard Lutnick said the government needed to bring semiconductors into the United States
“You can’t put all your semiconductor manufacturing 80 miles away from China,” he said. “It’s completely illogical…so we need to bring it back.”
“My goal for this administration when we leave office is to capture 40 percent market share in cutting-edge semiconductor manufacturing.”
Taiwan and the United States reached an agreement last month to reduce Taiwan’s export tariffs from 20% to 15% and allow Taiwan to increase investment in Taiwan.
Cheng said Taiwan’s technology parks will not be relocated, but Taiwan is willing to share its experience in building industrial clusters and help the United States build a similar environment.
She also said she believes Taiwan’s semiconductor capacity – including existing, under construction and planned projects in advanced manufacturing, advanced packaging and the broader supply chain – will far exceed its investment in the United States or any other country.
Lutnick said in an interview with CNBC last month that his goal is to move 40% of Taiwan’s entire chip supply chain and production to the United States. If this is not achieved, tariffs on Taiwan could rise to 100%, he said.
In September, Lutnick told the American television network NewsNation that the chip manufacturing plan proposed by Washington to Taiwan would be 50:50. Currently, the vast majority of chips are produced in Taiwan.
