Taiwan rejects US call to shift 40% chip capacity, calling it “impossible.”
Taipei says firms will expand in the US but keep core semiconductor growth at home.
US warns of 100% tariffs on chipmakers not increasing American production.
Taiwan’s tech sector commits $250bn FDI and major TSMC expansion in the US.
Taiwan has pushed back on Washington's proposal to relocate its 40% semiconductor capacity to the US. Taiwan Vice Premier Cheng Li-chiun called it an "impossible" task.
"I have made it very clear to the United States that this is impossible," she said during an interview with Taiwanese television channel CTS on Sunday, news agency Reuters reported.
3 February 2026
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Cheng also informed that the semiconductor industry would keep investing at home and continue to grow in Taiwan. However, she clarified that they will expand their presence in the US.
"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.
US' Chip Push
This came after Commerce Secretary Howard Lutnick stressed on bringing semiconductors to the US last week.
Last month, Lutnick said South Korean memory chipmakers and Taiwanese companies that aren’t investing in the US may face up to 100% tariffs unless they commit to increased production on American soil.
"Everyone who wants to build memory has two choices: They can pay a 100% tariff, or they can build in America,” he said.
Taiwan and the US concluded a deal last month to lower tariffs on the island's exports to 15% from 20%, waive tariffs on generic drugs and ingredients, aircraft components and natural resources unavailable domestically. As per the agreement, Taiwan’s tech industry would commit to at least $250bn in direct investments in the US. An additional $250bn in credit will also be provided for them to expand their production capacity in the US.
Taiwan Semiconductor Manufacturing Co. would build at least four more chipmaking plants in the US, in addition to six already planned plants, requiring roughly an additional $100bn of capital. In recent years, TSMC has committed more than $65bn to manufacturing in the US, and now plans to scale this up to $165bn as it supplies chips to firms such as Apple and Nvidia. These investments have also attracted support through grants under the US CHIPS and Science Act.
