Taiwan Vice Premier Cheng Li-chiun said it would be “impossible” to relocate 40% of the island’s semiconductor capacity to the United States. With this statement, Li-chiun has pushed back against recent comments from US officials calling for a significant shift in semiconductor production. In an interview with the Taiwanese television channel CTS, Li-chiun said she had made it clear to Washington that Taiwan’s semiconductor ecosystem, built over decades, could not be relocated, Reuters reported. “I have made it very clear to the United States that this is impossible,” she said, referring to the 40% goal the US has floated, the Reuters report noted. Li-chiun added that Taiwan’s semiconductor ecosystem will continue to grow domestically, with the industry maintaining domestic investment. “Our overall capacity (in Taiwan) will only continue to grow. 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,” she added, according to the Reuters report.This comes after US Commerce Secretary Howard Lutnick said last week that the government needed to bring semiconductors to America. He said, “You can’t have all semiconductor manufacturing 80 miles from China. That’s just illogical … So we need to bring it back.” Lutnick stated that his goal for the administration is, “When we leave office, my goal for this administration is 40% market share in leading-edge semiconductor manufacturing.”

What Taiwan said about the US proposal to relocate semiconductor capacity

Last month, Taiwan and the US reached a deal to lower tariffs on the island’s exports to 15% from 20% and to increase Taiwan’s investment in the country. Li-chiun said there would be no relocation of Taiwan’s science parks. Still, Taiwan was willing to share its experience in building an industry cluster and help the U.S. develop a similar environment, Reuters reported.Li-chiun 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 US or any other country.In an interview on CNBC last month, US Commerce Secretary Howard Lutnick said his goal was to bring 40% of Taiwan’s entire chip supply chain and production to the US. He said that if this does not happen, tariffs on Taiwan would likely rise to 100%. In September, Lutnick told the US television network NewsNation that Washington’s pitch to Taiwan would be a 50-50 split in chip production, the vast majority of which are now made on the island. Taiwan rejected that idea at the time. TSMC, a major contract chipmaker, is investing $165 billion to build factories in Arizona, US.