Taiwan Rejects U.S. Proposal for Equal Chip Production Split Amid Trade Talks

Taiwan’s rejection of the U.S. 50-50 semiconductor production split reflects the complexity of balancing economic ties and geopolitical security concerns. The ongoing tariff negotiations signal a pragmatic approach toward trade relations, while the U.S. push for onshoring chip manufacturing highlights strategic vulnerabilities in global supply chains. !-- wp:paragraph -->

• Opportunities: Tariff reductions could improve Taiwan’s export competitiveness and stabilize trade relations with the U.S.
• Risks: U.S. attempts to reshuffle chip production risk disrupting Taiwan’s technology sector and weakening its strategic position.
• Geopolitical Impact: Diminishing Taiwan’s chip manufacturing dominance may affect the island’s deterrence capabilities against Chinese military pressure.
• Supply Chain Resilience: Increased U.S. chip production could diversify supply but requires substantial investment and time.

Impact: Taiwan’s firm stance preserves its semiconductor industry’s central role and underlines the intricate link between technology leadership and national security in U.S.-Taiwan relations. !-- wp:paragraph --> The concept of the “Silicon Shield” posits that Taiwan’s dominance in semiconductor manufacturing acts as a deterrent against Chinese military aggression. Taiwan’s chip industry, led by TSMC, is a critical component of the global technology supply chain, making any military conflict potentially disruptive to worldwide electronics markets. !-- wp:paragraph --> While Secretary Lutnick dismissed the Silicon Shield’s protective value, arguing that greater U.S. chip production would enhance Taiwan’s security, the theory remains influential in Taipei’s strategic calculus. !-- wp:paragraph -->

FinOracleAI — Market View

Taiwan’s rejection of the U.S. 50-50 semiconductor production split reflects the complexity of balancing economic ties and geopolitical security concerns. The ongoing tariff negotiations signal a pragmatic approach toward trade relations, while the U.S. push for onshoring chip manufacturing highlights strategic vulnerabilities in global supply chains. !-- wp:paragraph -->

• Opportunities: Tariff reductions could improve Taiwan’s export competitiveness and stabilize trade relations with the U.S.
• Risks: U.S. attempts to reshuffle chip production risk disrupting Taiwan’s technology sector and weakening its strategic position.
• Geopolitical Impact: Diminishing Taiwan’s chip manufacturing dominance may affect the island’s deterrence capabilities against Chinese military pressure.
• Supply Chain Resilience: Increased U.S. chip production could diversify supply but requires substantial investment and time.

Impact: Taiwan’s firm stance preserves its semiconductor industry’s central role and underlines the intricate link between technology leadership and national security in U.S.-Taiwan relations. !-- wp:paragraph --> The concept of the “Silicon Shield” posits that Taiwan’s dominance in semiconductor manufacturing acts as a deterrent against Chinese military aggression. Taiwan’s chip industry, led by TSMC, is a critical component of the global technology supply chain, making any military conflict potentially disruptive to worldwide electronics markets. !-- wp:paragraph --> While Secretary Lutnick dismissed the Silicon Shield’s protective value, arguing that greater U.S. chip production would enhance Taiwan’s security, the theory remains influential in Taipei’s strategic calculus. !-- wp:paragraph -->

FinOracleAI — Market View

Taiwan’s rejection of the U.S. 50-50 semiconductor production split reflects the complexity of balancing economic ties and geopolitical security concerns. The ongoing tariff negotiations signal a pragmatic approach toward trade relations, while the U.S. push for onshoring chip manufacturing highlights strategic vulnerabilities in global supply chains. !-- wp:paragraph -->

• Opportunities: Tariff reductions could improve Taiwan’s export competitiveness and stabilize trade relations with the U.S.
• Risks: U.S. attempts to reshuffle chip production risk disrupting Taiwan’s technology sector and weakening its strategic position.
• Geopolitical Impact: Diminishing Taiwan’s chip manufacturing dominance may affect the island’s deterrence capabilities against Chinese military pressure.
• Supply Chain Resilience: Increased U.S. chip production could diversify supply but requires substantial investment and time.

Impact: Taiwan’s firm stance preserves its semiconductor industry’s central role and underlines the intricate link between technology leadership and national security in U.S.-Taiwan relations. !-- wp:paragraph --> Similarly, Huang Kuo-chang, chairman of the Taiwan People’s Party, criticized the proposal as an attempt to “hollow out the foundations of Taiwan’s technology sector.” !-- wp:paragraph -->

The Silicon Shield: Taiwan’s Semiconductor Industry as a Strategic Defense

The concept of the “Silicon Shield” posits that Taiwan’s dominance in semiconductor manufacturing acts as a deterrent against Chinese military aggression. Taiwan’s chip industry, led by TSMC, is a critical component of the global technology supply chain, making any military conflict potentially disruptive to worldwide electronics markets. !-- wp:paragraph --> While Secretary Lutnick dismissed the Silicon Shield’s protective value, arguing that greater U.S. chip production would enhance Taiwan’s security, the theory remains influential in Taipei’s strategic calculus. !-- wp:paragraph -->

FinOracleAI — Market View

Taiwan’s rejection of the U.S. 50-50 semiconductor production split reflects the complexity of balancing economic ties and geopolitical security concerns. The ongoing tariff negotiations signal a pragmatic approach toward trade relations, while the U.S. push for onshoring chip manufacturing highlights strategic vulnerabilities in global supply chains. !-- wp:paragraph -->

• Opportunities: Tariff reductions could improve Taiwan’s export competitiveness and stabilize trade relations with the U.S.
• Risks: U.S. attempts to reshuffle chip production risk disrupting Taiwan’s technology sector and weakening its strategic position.
• Geopolitical Impact: Diminishing Taiwan’s chip manufacturing dominance may affect the island’s deterrence capabilities against Chinese military pressure.
• Supply Chain Resilience: Increased U.S. chip production could diversify supply but requires substantial investment and time.

Impact: Taiwan’s firm stance preserves its semiconductor industry’s central role and underlines the intricate link between technology leadership and national security in U.S.-Taiwan relations. !-- wp:paragraph --> Taiwanese politicians have condemned the U.S. proposal. Eric Chu, chairman of the Kuomintang opposition party, labeled it “an act of exploitation and plunder,” underscoring the political sensitivity surrounding Taiwan’s semiconductor sector. !-- wp:paragraph -->

“No one can sell out Taiwan or TSMC, and no one can undermine Taiwan’s silicon shield,” Chu asserted, referencing the island’s leading chip manufacturer and its role in national security.

Similarly, Huang Kuo-chang, chairman of the Taiwan People’s Party, criticized the proposal as an attempt to “hollow out the foundations of Taiwan’s technology sector.” !-- wp:paragraph -->

The Silicon Shield: Taiwan’s Semiconductor Industry as a Strategic Defense

The concept of the “Silicon Shield” posits that Taiwan’s dominance in semiconductor manufacturing acts as a deterrent against Chinese military aggression. Taiwan’s chip industry, led by TSMC, is a critical component of the global technology supply chain, making any military conflict potentially disruptive to worldwide electronics markets. !-- wp:paragraph --> While Secretary Lutnick dismissed the Silicon Shield’s protective value, arguing that greater U.S. chip production would enhance Taiwan’s security, the theory remains influential in Taipei’s strategic calculus. !-- wp:paragraph -->

FinOracleAI — Market View

Taiwan’s rejection of the U.S. 50-50 semiconductor production split reflects the complexity of balancing economic ties and geopolitical security concerns. The ongoing tariff negotiations signal a pragmatic approach toward trade relations, while the U.S. push for onshoring chip manufacturing highlights strategic vulnerabilities in global supply chains. !-- wp:paragraph -->

• Opportunities: Tariff reductions could improve Taiwan’s export competitiveness and stabilize trade relations with the U.S.
• Risks: U.S. attempts to reshuffle chip production risk disrupting Taiwan’s technology sector and weakening its strategic position.
• Geopolitical Impact: Diminishing Taiwan’s chip manufacturing dominance may affect the island’s deterrence capabilities against Chinese military pressure.
• Supply Chain Resilience: Increased U.S. chip production could diversify supply but requires substantial investment and time.

Impact: Taiwan’s firm stance preserves its semiconductor industry’s central role and underlines the intricate link between technology leadership and national security in U.S.-Taiwan relations. !-- wp:paragraph --> Commerce Secretary Lutnick has been vocal about the administration’s goal to significantly onshore chip manufacturing to the U.S., citing national security and supply chain resilience. He described the current situation as untenable, given the U.S. reliance on Taiwan for nearly all its advanced semiconductor needs. !-- wp:paragraph --> “My objective, and this administration’s objective, is to get chip manufacturing significantly onshored — we need to make our own chips,” Lutnick stated in a recent interview. “The idea that I pitched [Taiwan] was, let’s get to 50-50. We’re producing half, and you’re producing half.” !-- wp:paragraph -->

Strong Opposition from Taiwanese Political Leaders

Taiwanese politicians have condemned the U.S. proposal. Eric Chu, chairman of the Kuomintang opposition party, labeled it “an act of exploitation and plunder,” underscoring the political sensitivity surrounding Taiwan’s semiconductor sector. !-- wp:paragraph -->

“No one can sell out Taiwan or TSMC, and no one can undermine Taiwan’s silicon shield,” Chu asserted, referencing the island’s leading chip manufacturer and its role in national security.

Similarly, Huang Kuo-chang, chairman of the Taiwan People’s Party, criticized the proposal as an attempt to “hollow out the foundations of Taiwan’s technology sector.” !-- wp:paragraph -->

The Silicon Shield: Taiwan’s Semiconductor Industry as a Strategic Defense

The concept of the “Silicon Shield” posits that Taiwan’s dominance in semiconductor manufacturing acts as a deterrent against Chinese military aggression. Taiwan’s chip industry, led by TSMC, is a critical component of the global technology supply chain, making any military conflict potentially disruptive to worldwide electronics markets. !-- wp:paragraph --> While Secretary Lutnick dismissed the Silicon Shield’s protective value, arguing that greater U.S. chip production would enhance Taiwan’s security, the theory remains influential in Taipei’s strategic calculus. !-- wp:paragraph -->

FinOracleAI — Market View

Taiwan’s rejection of the U.S. 50-50 semiconductor production split reflects the complexity of balancing economic ties and geopolitical security concerns. The ongoing tariff negotiations signal a pragmatic approach toward trade relations, while the U.S. push for onshoring chip manufacturing highlights strategic vulnerabilities in global supply chains. !-- wp:paragraph -->

• Opportunities: Tariff reductions could improve Taiwan’s export competitiveness and stabilize trade relations with the U.S.
• Risks: U.S. attempts to reshuffle chip production risk disrupting Taiwan’s technology sector and weakening its strategic position.
• Geopolitical Impact: Diminishing Taiwan’s chip manufacturing dominance may affect the island’s deterrence capabilities against Chinese military pressure.
• Supply Chain Resilience: Increased U.S. chip production could diversify supply but requires substantial investment and time.

Impact: Taiwan’s firm stance preserves its semiconductor industry’s central role and underlines the intricate link between technology leadership and national security in U.S.-Taiwan relations. !-- wp:paragraph --> Commerce Secretary Lutnick has been vocal about the administration’s goal to significantly onshore chip manufacturing to the U.S., citing national security and supply chain resilience. He described the current situation as untenable, given the U.S. reliance on Taiwan for nearly all its advanced semiconductor needs. !-- wp:paragraph --> “My objective, and this administration’s objective, is to get chip manufacturing significantly onshored — we need to make our own chips,” Lutnick stated in a recent interview. “The idea that I pitched [Taiwan] was, let’s get to 50-50. We’re producing half, and you’re producing half.” !-- wp:paragraph -->

Strong Opposition from Taiwanese Political Leaders

Taiwanese politicians have condemned the U.S. proposal. Eric Chu, chairman of the Kuomintang opposition party, labeled it “an act of exploitation and plunder,” underscoring the political sensitivity surrounding Taiwan’s semiconductor sector. !-- wp:paragraph -->

“No one can sell out Taiwan or TSMC, and no one can undermine Taiwan’s silicon shield,” Chu asserted, referencing the island’s leading chip manufacturer and its role in national security.

Similarly, Huang Kuo-chang, chairman of the Taiwan People’s Party, criticized the proposal as an attempt to “hollow out the foundations of Taiwan’s technology sector.” !-- wp:paragraph -->

The Silicon Shield: Taiwan’s Semiconductor Industry as a Strategic Defense

The concept of the “Silicon Shield” posits that Taiwan’s dominance in semiconductor manufacturing acts as a deterrent against Chinese military aggression. Taiwan’s chip industry, led by TSMC, is a critical component of the global technology supply chain, making any military conflict potentially disruptive to worldwide electronics markets. !-- wp:paragraph --> While Secretary Lutnick dismissed the Silicon Shield’s protective value, arguing that greater U.S. chip production would enhance Taiwan’s security, the theory remains influential in Taipei’s strategic calculus. !-- wp:paragraph -->

FinOracleAI — Market View

Taiwan’s rejection of the U.S. 50-50 semiconductor production split reflects the complexity of balancing economic ties and geopolitical security concerns. The ongoing tariff negotiations signal a pragmatic approach toward trade relations, while the U.S. push for onshoring chip manufacturing highlights strategic vulnerabilities in global supply chains. !-- wp:paragraph -->

• Opportunities: Tariff reductions could improve Taiwan’s export competitiveness and stabilize trade relations with the U.S.
• Risks: U.S. attempts to reshuffle chip production risk disrupting Taiwan’s technology sector and weakening its strategic position.
• Geopolitical Impact: Diminishing Taiwan’s chip manufacturing dominance may affect the island’s deterrence capabilities against Chinese military pressure.
• Supply Chain Resilience: Increased U.S. chip production could diversify supply but requires substantial investment and time.

Impact: Taiwan’s firm stance preserves its semiconductor industry’s central role and underlines the intricate link between technology leadership and national security in U.S.-Taiwan relations. !-- wp:paragraph --> Cheng emphasized that the primary objectives of the recent negotiations were to lower the existing reciprocal tariff rate of 20% imposed on Taiwanese exports, secure exemptions from tariff stacking, and reduce other levies impacting Taiwan’s semiconductor shipments to the U.S. There was no engagement on shifting production volumes between the two countries. !-- wp:paragraph -->

“The proposal for a ’50-50′ split in semiconductor production was not even discussed,” Cheng said, according to Taiwan’s Central News Agency.

U.S. Administration Pushes for Onshoring Chip Manufacturing

Commerce Secretary Lutnick has been vocal about the administration’s goal to significantly onshore chip manufacturing to the U.S., citing national security and supply chain resilience. He described the current situation as untenable, given the U.S. reliance on Taiwan for nearly all its advanced semiconductor needs. !-- wp:paragraph --> “My objective, and this administration’s objective, is to get chip manufacturing significantly onshored — we need to make our own chips,” Lutnick stated in a recent interview. “The idea that I pitched [Taiwan] was, let’s get to 50-50. We’re producing half, and you’re producing half.” !-- wp:paragraph -->

Strong Opposition from Taiwanese Political Leaders

Taiwanese politicians have condemned the U.S. proposal. Eric Chu, chairman of the Kuomintang opposition party, labeled it “an act of exploitation and plunder,” underscoring the political sensitivity surrounding Taiwan’s semiconductor sector. !-- wp:paragraph -->

“No one can sell out Taiwan or TSMC, and no one can undermine Taiwan’s silicon shield,” Chu asserted, referencing the island’s leading chip manufacturer and its role in national security.

Similarly, Huang Kuo-chang, chairman of the Taiwan People’s Party, criticized the proposal as an attempt to “hollow out the foundations of Taiwan’s technology sector.” !-- wp:paragraph -->

The Silicon Shield: Taiwan’s Semiconductor Industry as a Strategic Defense

The concept of the “Silicon Shield” posits that Taiwan’s dominance in semiconductor manufacturing acts as a deterrent against Chinese military aggression. Taiwan’s chip industry, led by TSMC, is a critical component of the global technology supply chain, making any military conflict potentially disruptive to worldwide electronics markets. !-- wp:paragraph --> While Secretary Lutnick dismissed the Silicon Shield’s protective value, arguing that greater U.S. chip production would enhance Taiwan’s security, the theory remains influential in Taipei’s strategic calculus. !-- wp:paragraph -->

FinOracleAI — Market View

Taiwan’s rejection of the U.S. 50-50 semiconductor production split reflects the complexity of balancing economic ties and geopolitical security concerns. The ongoing tariff negotiations signal a pragmatic approach toward trade relations, while the U.S. push for onshoring chip manufacturing highlights strategic vulnerabilities in global supply chains. !-- wp:paragraph -->

• Opportunities: Tariff reductions could improve Taiwan’s export competitiveness and stabilize trade relations with the U.S.
• Risks: U.S. attempts to reshuffle chip production risk disrupting Taiwan’s technology sector and weakening its strategic position.
• Geopolitical Impact: Diminishing Taiwan’s chip manufacturing dominance may affect the island’s deterrence capabilities against Chinese military pressure.
• Supply Chain Resilience: Increased U.S. chip production could diversify supply but requires substantial investment and time.

Impact: Taiwan’s firm stance preserves its semiconductor industry’s central role and underlines the intricate link between technology leadership and national security in U.S.-Taiwan relations. !-- wp:paragraph --> Taiwan’s Vice Premier and top trade negotiator, Cheng Li-chiun, has unequivocally rejected the U.S. proposal demanding that Taiwan manufacture half of the semiconductor chips consumed by the United States domestically. Speaking after returning from trade discussions in Washington, Cheng clarified that the so-called “50-50” split was not a topic of negotiation, with discussions instead centered on tariff reductions and export levies. !-- wp:paragraph --> The proposal, put forward by U.S. Commerce Secretary Howard Lutnick, aims to rebalance chip production to reduce American dependence on Taiwanese manufacturers, notably Taiwan Semiconductor Manufacturing Company (TSMC), which currently supplies approximately 95% of U.S. chip demand. !-- wp:paragraph -->

Trade Talks Focused on Tariffs and Export Levies

Cheng emphasized that the primary objectives of the recent negotiations were to lower the existing reciprocal tariff rate of 20% imposed on Taiwanese exports, secure exemptions from tariff stacking, and reduce other levies impacting Taiwan’s semiconductor shipments to the U.S. There was no engagement on shifting production volumes between the two countries. !-- wp:paragraph -->

“The proposal for a ’50-50′ split in semiconductor production was not even discussed,” Cheng said, according to Taiwan’s Central News Agency.

U.S. Administration Pushes for Onshoring Chip Manufacturing

Commerce Secretary Lutnick has been vocal about the administration’s goal to significantly onshore chip manufacturing to the U.S., citing national security and supply chain resilience. He described the current situation as untenable, given the U.S. reliance on Taiwan for nearly all its advanced semiconductor needs. !-- wp:paragraph --> “My objective, and this administration’s objective, is to get chip manufacturing significantly onshored — we need to make our own chips,” Lutnick stated in a recent interview. “The idea that I pitched [Taiwan] was, let’s get to 50-50. We’re producing half, and you’re producing half.” !-- wp:paragraph -->

Strong Opposition from Taiwanese Political Leaders

Taiwanese politicians have condemned the U.S. proposal. Eric Chu, chairman of the Kuomintang opposition party, labeled it “an act of exploitation and plunder,” underscoring the political sensitivity surrounding Taiwan’s semiconductor sector. !-- wp:paragraph -->

“No one can sell out Taiwan or TSMC, and no one can undermine Taiwan’s silicon shield,” Chu asserted, referencing the island’s leading chip manufacturer and its role in national security.

Similarly, Huang Kuo-chang, chairman of the Taiwan People’s Party, criticized the proposal as an attempt to “hollow out the foundations of Taiwan’s technology sector.” !-- wp:paragraph -->

The Silicon Shield: Taiwan’s Semiconductor Industry as a Strategic Defense

The concept of the “Silicon Shield” posits that Taiwan’s dominance in semiconductor manufacturing acts as a deterrent against Chinese military aggression. Taiwan’s chip industry, led by TSMC, is a critical component of the global technology supply chain, making any military conflict potentially disruptive to worldwide electronics markets. !-- wp:paragraph --> While Secretary Lutnick dismissed the Silicon Shield’s protective value, arguing that greater U.S. chip production would enhance Taiwan’s security, the theory remains influential in Taipei’s strategic calculus. !-- wp:paragraph -->

FinOracleAI — Market View

Taiwan’s rejection of the U.S. 50-50 semiconductor production split reflects the complexity of balancing economic ties and geopolitical security concerns. The ongoing tariff negotiations signal a pragmatic approach toward trade relations, while the U.S. push for onshoring chip manufacturing highlights strategic vulnerabilities in global supply chains. !-- wp:paragraph -->

• Opportunities: Tariff reductions could improve Taiwan’s export competitiveness and stabilize trade relations with the U.S.
• Risks: U.S. attempts to reshuffle chip production risk disrupting Taiwan’s technology sector and weakening its strategic position.
• Geopolitical Impact: Diminishing Taiwan’s chip manufacturing dominance may affect the island’s deterrence capabilities against Chinese military pressure.
• Supply Chain Resilience: Increased U.S. chip production could diversify supply but requires substantial investment and time.

Impact: Taiwan’s firm stance preserves its semiconductor industry’s central role and underlines the intricate link between technology leadership and national security in U.S.-Taiwan relations. !-- wp:paragraph --> Taiwan’s Vice Premier and top trade negotiator, Cheng Li-chiun, has unequivocally rejected the U.S. proposal demanding that Taiwan manufacture half of the semiconductor chips consumed by the United States domestically. Speaking after returning from trade discussions in Washington, Cheng clarified that the so-called “50-50” split was not a topic of negotiation, with discussions instead centered on tariff reductions and export levies. !-- wp:paragraph --> The proposal, put forward by U.S. Commerce Secretary Howard Lutnick, aims to rebalance chip production to reduce American dependence on Taiwanese manufacturers, notably Taiwan Semiconductor Manufacturing Company (TSMC), which currently supplies approximately 95% of U.S. chip demand. !-- wp:paragraph -->

Trade Talks Focused on Tariffs and Export Levies

Cheng emphasized that the primary objectives of the recent negotiations were to lower the existing reciprocal tariff rate of 20% imposed on Taiwanese exports, secure exemptions from tariff stacking, and reduce other levies impacting Taiwan’s semiconductor shipments to the U.S. There was no engagement on shifting production volumes between the two countries. !-- wp:paragraph -->

“The proposal for a ’50-50′ split in semiconductor production was not even discussed,” Cheng said, according to Taiwan’s Central News Agency.

U.S. Administration Pushes for Onshoring Chip Manufacturing

Commerce Secretary Lutnick has been vocal about the administration’s goal to significantly onshore chip manufacturing to the U.S., citing national security and supply chain resilience. He described the current situation as untenable, given the U.S. reliance on Taiwan for nearly all its advanced semiconductor needs. !-- wp:paragraph --> “My objective, and this administration’s objective, is to get chip manufacturing significantly onshored — we need to make our own chips,” Lutnick stated in a recent interview. “The idea that I pitched [Taiwan] was, let’s get to 50-50. We’re producing half, and you’re producing half.” !-- wp:paragraph -->

Strong Opposition from Taiwanese Political Leaders

Taiwanese politicians have condemned the U.S. proposal. Eric Chu, chairman of the Kuomintang opposition party, labeled it “an act of exploitation and plunder,” underscoring the political sensitivity surrounding Taiwan’s semiconductor sector. !-- wp:paragraph -->

“No one can sell out Taiwan or TSMC, and no one can undermine Taiwan’s silicon shield,” Chu asserted, referencing the island’s leading chip manufacturer and its role in national security.

Similarly, Huang Kuo-chang, chairman of the Taiwan People’s Party, criticized the proposal as an attempt to “hollow out the foundations of Taiwan’s technology sector.” !-- wp:paragraph -->

The Silicon Shield: Taiwan’s Semiconductor Industry as a Strategic Defense

The concept of the “Silicon Shield” posits that Taiwan’s dominance in semiconductor manufacturing acts as a deterrent against Chinese military aggression. Taiwan’s chip industry, led by TSMC, is a critical component of the global technology supply chain, making any military conflict potentially disruptive to worldwide electronics markets. !-- wp:paragraph --> While Secretary Lutnick dismissed the Silicon Shield’s protective value, arguing that greater U.S. chip production would enhance Taiwan’s security, the theory remains influential in Taipei’s strategic calculus. !-- wp:paragraph -->

FinOracleAI — Market View

Taiwan’s rejection of the U.S. 50-50 semiconductor production split reflects the complexity of balancing economic ties and geopolitical security concerns. The ongoing tariff negotiations signal a pragmatic approach toward trade relations, while the U.S. push for onshoring chip manufacturing highlights strategic vulnerabilities in global supply chains. !-- wp:paragraph -->

• Opportunities: Tariff reductions could improve Taiwan’s export competitiveness and stabilize trade relations with the U.S.
• Risks: U.S. attempts to reshuffle chip production risk disrupting Taiwan’s technology sector and weakening its strategic position.
• Geopolitical Impact: Diminishing Taiwan’s chip manufacturing dominance may affect the island’s deterrence capabilities against Chinese military pressure.
• Supply Chain Resilience: Increased U.S. chip production could diversify supply but requires substantial investment and time.

Impact: Taiwan’s firm stance preserves its semiconductor industry’s central role and underlines the intricate link between technology leadership and national security in U.S.-Taiwan relations. !-- wp:paragraph -->

Taiwan Rejects U.S. Proposal for Equal Semiconductor Production Split

Taiwan’s Vice Premier and top trade negotiator, Cheng Li-chiun, has unequivocally rejected the U.S. proposal demanding that Taiwan manufacture half of the semiconductor chips consumed by the United States domestically. Speaking after returning from trade discussions in Washington, Cheng clarified that the so-called “50-50” split was not a topic of negotiation, with discussions instead centered on tariff reductions and export levies. !-- wp:paragraph --> The proposal, put forward by U.S. Commerce Secretary Howard Lutnick, aims to rebalance chip production to reduce American dependence on Taiwanese manufacturers, notably Taiwan Semiconductor Manufacturing Company (TSMC), which currently supplies approximately 95% of U.S. chip demand. !-- wp:paragraph -->

Trade Talks Focused on Tariffs and Export Levies

Cheng emphasized that the primary objectives of the recent negotiations were to lower the existing reciprocal tariff rate of 20% imposed on Taiwanese exports, secure exemptions from tariff stacking, and reduce other levies impacting Taiwan’s semiconductor shipments to the U.S. There was no engagement on shifting production volumes between the two countries. !-- wp:paragraph -->

“The proposal for a ’50-50′ split in semiconductor production was not even discussed,” Cheng said, according to Taiwan’s Central News Agency.

U.S. Administration Pushes for Onshoring Chip Manufacturing

Commerce Secretary Lutnick has been vocal about the administration’s goal to significantly onshore chip manufacturing to the U.S., citing national security and supply chain resilience. He described the current situation as untenable, given the U.S. reliance on Taiwan for nearly all its advanced semiconductor needs. !-- wp:paragraph --> “My objective, and this administration’s objective, is to get chip manufacturing significantly onshored — we need to make our own chips,” Lutnick stated in a recent interview. “The idea that I pitched [Taiwan] was, let’s get to 50-50. We’re producing half, and you’re producing half.” !-- wp:paragraph -->

Strong Opposition from Taiwanese Political Leaders

Taiwanese politicians have condemned the U.S. proposal. Eric Chu, chairman of the Kuomintang opposition party, labeled it “an act of exploitation and plunder,” underscoring the political sensitivity surrounding Taiwan’s semiconductor sector. !-- wp:paragraph -->

“No one can sell out Taiwan or TSMC, and no one can undermine Taiwan’s silicon shield,” Chu asserted, referencing the island’s leading chip manufacturer and its role in national security.

Similarly, Huang Kuo-chang, chairman of the Taiwan People’s Party, criticized the proposal as an attempt to “hollow out the foundations of Taiwan’s technology sector.” !-- wp:paragraph -->

The Silicon Shield: Taiwan’s Semiconductor Industry as a Strategic Defense

The concept of the “Silicon Shield” posits that Taiwan’s dominance in semiconductor manufacturing acts as a deterrent against Chinese military aggression. Taiwan’s chip industry, led by TSMC, is a critical component of the global technology supply chain, making any military conflict potentially disruptive to worldwide electronics markets. !-- wp:paragraph --> While Secretary Lutnick dismissed the Silicon Shield’s protective value, arguing that greater U.S. chip production would enhance Taiwan’s security, the theory remains influential in Taipei’s strategic calculus. !-- wp:paragraph -->

FinOracleAI — Market View

Taiwan’s rejection of the U.S. 50-50 semiconductor production split reflects the complexity of balancing economic ties and geopolitical security concerns. The ongoing tariff negotiations signal a pragmatic approach toward trade relations, while the U.S. push for onshoring chip manufacturing highlights strategic vulnerabilities in global supply chains. !-- wp:paragraph -->

• Opportunities: Tariff reductions could improve Taiwan’s export competitiveness and stabilize trade relations with the U.S.
• Risks: U.S. attempts to reshuffle chip production risk disrupting Taiwan’s technology sector and weakening its strategic position.
• Geopolitical Impact: Diminishing Taiwan’s chip manufacturing dominance may affect the island’s deterrence capabilities against Chinese military pressure.
• Supply Chain Resilience: Increased U.S. chip production could diversify supply but requires substantial investment and time.

Impact: Taiwan’s firm stance preserves its semiconductor industry’s central role and underlines the intricate link between technology leadership and national security in U.S.-Taiwan relations. !-- wp:paragraph -->