Full Breakdown
Taiwan Rejects U.S. Proposal for 50-50 Semiconductor Production Split
10/2/2025, 9:38:24 PM
Taiwan's Firm Stance on Semiconductor Production
Taiwan's Vice Premier Cheng Li-chiun has firmly rejected a proposal from U.S. Secretary of Commerce Howard Lutnick that suggested a 50-50 split in semiconductor production between the two nations. Cheng, upon returning from trade negotiations in the U.S., emphasized that Taiwan has never committed to such an arrangement. "This issue was not discussed in this round of negotiation, and we will not agree to such a condition," she stated at a press conference at Taoyuan International Airport. The proposal, which aims to reduce U.S. reliance on Taiwanese semiconductor manufacturing, has been a point of contention in ongoing trade discussions.
Background and Context of the Proposal
The U.S. has expressed concerns over its heavy dependence on Taiwan Semiconductor Manufacturing Company (TSMC) and its suppliers, particularly highlighted during the COVID-19 pandemic when semiconductor shortages affected various industries. The U.S. Commerce Department initiated a Section 232 investigation in April to assess potential tariffs on semiconductor imports, citing national security risks. Taiwan's exports to the U.S. are currently subject to a 20% tariff, which has prompted Taiwanese officials to seek more favorable terms in trade negotiations.
Official Statements & Responses
In response to the U.S. proposal, Taiwan's Executive Yuan stated that the 50-50 condition "goes against Taiwan-U.S. supply chain cooperation." Cheng reiterated that the focus of the recent negotiations was on tariff reductions and exemptions under Section 232, rather than the proposed production split. The Taiwanese government has expressed a desire for a more favorable tariff rate and preferential treatment for its exports, which are predominantly semiconductor-related.
Criticism & Opposition
The proposal has faced backlash from Taiwanese political parties, including the opposition Kuomintang (KMT) and the Taiwan People's Party (TPP). KMT lawmaker Hsu Yu-chen criticized the proposal as "exploitation and plunder," while KMT Chairman Eric Chu asserted that no one could "sell out Taiwan or TSMC." TPP Chairman Huang Kuo-chang described the proposal as an attempt to "hollow out the foundations of Taiwan's technology sector."
Verbatim Quotes
- “Our negotiating team has never made any commitment to a 50-50 split on chips. Rest assured, we did not discuss this issue during this round of talks, nor would we agree to such conditions,” — Cheng Li-chiun, Vice Premier of Taiwan
- “No one can sell out Taiwan or TSMC, and no one can undermine Taiwan's silicon shield,” — Eric Chu, Chairman of the Kuomintang
- “I want to clarify to Taiwanese people that this is the idea of the U.S. side. Our negotiating team has never made any commitment to a 50-50 split on chips,” — Cheng Li-chiun, Vice Premier of Taiwan
What's Next
As negotiations continue, Taiwan aims to finalize a trade agreement with the U.S. that addresses tariff rates and supply chain cooperation. The outcome of the ongoing Section 232 investigation will also play a crucial role in shaping future trade relations between the two nations.
