U.S. Pressure on Taiwan
U.S. Commerce Secretary Howard Lutnick warned that concentrating a large share of advanced semiconductor production near China creates a strategic vulnerability. He outlined a goal for the United States to capture 40% of the leading‑edge market within three years, a timeline that would require building new fabs and ramping them up quickly.
Lutnick also hinted that failure to meet the target could trigger tariffs on Taiwan‑made goods of up to 100%.
Taiwan's Response
Taiwan’s government rejected the notion of relocating 40% of its chip output to the United States, calling it “not feasible.” Officials emphasized that the island’s science parks—core components of its “silicon shield”—will remain in place.
While Taiwan has no objection to TSMC expanding overseas, it insists that the most advanced process technologies stay on the island.
Implications for Global Chip Supply
Keeping the cutting‑edge manufacturing capacity in Taiwan helps preserve supply‑chain stability for high‑performance chips used in smartphones, data centers, and defense applications.
If tariffs were imposed, both Taiwanese exporters and U.S. manufacturers could face higher costs and potential shortages.
Key Points
- U.S. aims for 40% share of leading‑edge semiconductor market by 2029.
- Building and ramping a U.S. fab typically takes four years.
- Taiwan plans to continue expanding TSMC and UMC capacity locally.
- Overseas expansion of TSMC is acceptable as long as advanced nodes stay in Taiwan.
- Potential tariffs could reach 100% on Taiwan‑made goods if goals are not met.