Taiwan has rejected a U.S. proposal that it shift half of its semiconductor production to America, with officials and media on the island warning the plan would damage its economy and cost jobs. The idea was revealed by U.S. Commerce Secretary Howard Lutnick, who said the Trump administration wants a “50–50 split” to cut America’s reliance on Taiwanese chips.
Lutnick argued that with 95% of U.S. chips currently made in Taiwan — “9,000 miles away” — the risks were growing given Beijing’s threats toward the island. But Taiwan’s Democratic Progressive Party (DPP) authorities and local media immediately pushed back, calling the plan exploitative and warning it would hollow out a vital industry.
The U.S. has already attracted some Taiwanese investment through its CHIPS Act, with TSMC building plants in Arizona. Still, Taipei sees control of its chip sector as both an economic cornerstone and a geopolitical safeguard, making it unlikely to yield ground easily. The clash highlights rising friction between Washington’s push to “onshore” supply chains and Taiwan’s desire to retain its dominance in advanced semiconductor production.
