Taiwan has declared it impossible to shift 40% of its semiconductor manufacturing to the United States, a direct challenge to a key U.S. policy goal. Vice Premier Cheng Li-chiun stated the island's semiconductor ecosystem, developed over decades, cannot be relocated, though Taiwan will continue expanding its domestic capacity.

This stance counters repeated demands from U.S. officials like Commerce Secretary Howard Lutnick, who seeks 40% of leading-edge chip production stateside, citing geopolitical risks. The tension follows a recent bilateral tariff deal where Taiwan agreed to lower export tariffs to 15% in exchange for increased U.S. investment, not relocation.

While Taiwan rejects wholesale relocation, it acknowledges strategic international expansion. TSMC, the world's largest contract chipmaker, is investing $165 billion in Arizona facilities. Cheng emphasized that any U.S. presence is premised on remaining firmly rooted in Taiwan, with domestic investments far outpacing overseas projects.

Quick Fact: TSMC is investing $165 billion to build factories in Arizona.