Taiwan Declines US 50-50 Chip Production Proposal Prioritizes Tariff Discussions in Trade Talks
Taiwan Rejects U.S. Proposal to Split Semiconductor Manufacturing
Key Issues in Taiwan-U.S. Semiconductor Talks
Taiwan Semiconductor Manufacturing Company, Limited, located in Hsinchu Science Park, remains a focal point in international trade discussions. In a recent development, Taiwan’s top trade negotiator, Cheng Li-chiun, stated that the island will not accept the U.S. proposal to produce half of the chips domestically that it currently supplies to America. Although Washington suggested a “50-50” manufacturing division, the proposal was not addressed in the latest trade talks, according to Taiwan’s Central News Agency.
Focus on Tariff Concerns
Cheng emphasized that the discussions concentrated on reducing tariff rates, excluding Taiwan from additional duties, and decreasing levies on Taiwanese exports. At present, Taiwan faces a reciprocal tariff rate of 20%, which has been a critical point of contention.
U.S. Aims for Semiconductor Independence
Commerce Secretary Howard Lutnick revealed that the U.S. has been in conversations with Taipei regarding the production split to lessen American dependence on Taiwan. In an interview with NewsNation, Lutnick shared that 95% of the U.S. semiconductor demands are met by chips manufactured in Taiwan. The goal, he noted, is to onshore semiconductor production significantly and achieve a balanced production between Taiwan and the U.S.
Political Backlash in Taiwan
Lutnick’s proposal has faced criticism from Taiwanese politicians. Eric Chu, Chairman of the Kuomintang party, denounced the proposal as an act of “exploitation and plunder.” He defended Taiwan Semiconductor Manufacturing Company, underscoring its role in the island’s defense, often described by the “Silicon Shield” theory. The theory suggests that Taiwan’s dominance in chip manufacturing acts as a deterrent against direct military action from China.
Mixed Views on Taiwan’s Security
While Lutnick downplayed the significance of the “Silicon Shield,” advocating for a more balanced chip production strategy for Taiwan’s safety, political figures like Taiwan People’s Party Chairman Huang Kuo-chang accused the proposal of attempting to undermine Taiwan’s technological foundation.
China, which considers Taiwan a part of its territory, has vowed to reclaim the island, using force if necessary—a claim firmly rejected by Taiwan. Emegypt will continue to monitor and report on developments in this critical geopolitical issue affecting the global semiconductor industry.
