Taiwan Rejects Shifting 40% of Chip Capacity to US
By Reuters | 08 Feb, 2026

Vice Premier Cheng Li-chiun told US Commerce Secretary Howard Lutnick that Taiwan's chip sector is firmly rooted in its home country and will continue expanding at home despite the $165 billion committed to Arizona plants under last year's tariff agreement.

It would be "impossible" to move 40% of Taiwan's semiconductor capacity to the U.S., the island's top tariff negotiator said, pushing back against recent comments by American officials who called for a major production shift.

In an interview with Taiwanese television channel CTS that was broadcast late on Sunday, Taiwan Vice Premier Cheng Li-chiun said she had made it clear to Washington that Taiwan's semiconductor ecosystem, built up over decades, could not be relocated.

"I have made it very clear to the United States that this is impossible," she said, referring to the 40% goal the U.S. has floated.

That ecosystem will continue to grow in Taiwan, Cheng said, adding that the semiconductor industry would keep investing at home. 

"Our overall capacity (in Taiwan) will only continue to grow," she said. "But we can expand our presence in the United States."

"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."

On Tuesday, U.S. Commerce Secretary Howard Lutnick said the government needed to bring semiconductors to the U.S.

"You can't have all semiconductor manufacturing 80 miles from China," he said. "That's just illogical ... So we need to bring it back."

"When we leave office my goal, for this administration, is 40% market share in leading-edge semiconductor manufacturing."

Taiwan and the U.S. reached a deal last month to lower tariffs on the island's exports to 15% from 20% and for Taiwan to increase its investment in the country.

Cheng said that there would be no relocation of Taiwan's science parks, but Taiwan was willing to share its experience in building an industry cluster and help the U.S. develop a similar environment.

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 U.S. or any other country.

    In an interview on CNBC last month, Lutnick said his goal was to bring 40% of Taiwan's entire chip supply chain and production to the U.S. He said that if this does not happen, tariffs on Taiwan would likely rise to 100%. 

In September, Lutnick told U.S. television network NewsNation that Washington's pitch to Taiwan would be a 50-50 split in making chips, the vast majority of which are now made on the island.

Taiwan rejected that idea at the time.

TSMC, the world's largest contract chipmaker, is investing $165 billion to build factories in the U.S. state of Arizona.

(Reporting by Wen-Yee Lee and Ben Blanchard; Editing by Thomas Derpinghaus)