Taiwan Tells Washington Its 40% Chip Relocation Goal Is 'Impossible' — And the Global Semiconductor Battle Is Just Getting Started
Taiwan's top trade negotiator has delivered a blunt message to Washington: the United States' ambition to relocate 40% of the island's semiconductor production capacity to American soil is simply not achievable. Vice Premier Cheng Li-chiun, Taipei's lead tariff negotiator, told a local television audience on Sunday that she had made it clear to the U.S. that Taiwan's semiconductor ecosystem, built over decades of sustained investment, could not be uprooted and transplanted across the Pacific. The pushback comes just weeks after U.S. Commerce Secretary Howard Lutnick laid out aggressive onshoring targets in a January interview, declaring he wanted 40% of Taiwan's entire chip supply chain moved to the U.S. within President Donald Trump's current term. Lutnick's comments followed the latest U.S.-Taiwan trade agreement, under which Taiwanese tech companies pledged $250 billion in direct investments and an additional $250 billion in credit to expand U.S. production capacity. In return, Washington lowered tariffs on most Taiwanese goods from 20% to 15% and offered higher quotas for tariff-free chip exports. The dispute spotlights a fundamental tension at the heart of American industrial policy: the desire to bring advanced chip manufacturing home versus the practical reality that the world's most sophisticated semiconductor supply chain cannot be duplicated overnight — if it can be duplicated at all.