Taiwan has rejected the U.S. proposal to relocate 40% of its semiconductor supply chain to the U.S., labeling such an endeavor as “impossible,” according to Vice Premier Cheng Li-chiun. This stance counters the onshoring goals presented by U.S. Commerce Secretary Howard Lutnick following a trade agreement between the two nations, which includes Taiwan pledging $250 billion in direct investments and another $250 billion in credit for expanding U.S. production capacity. However, the “Silicon Shield” theory—that Taiwan’s critical role in the global semiconductor industry acts as a deterrent against Chinese aggression—reinforces Taiwan’s reluctance to move its supply chains abroad. Additionally, analysts have highlighted the challenges of reestablishing Taiwan’s advanced semiconductor ecosystem in the U.S. due to labor shortages and elevated costs.
Taiwan rejects US move to relocate 40% of its chip supply chain
