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Lawrence Chung

Taiwan has sought to ease public fears that its prized chip industry could be hollowed out following US Commerce Secretary Howard Lutnick’s call for semiconductor manufacturing to be evenly divided between the island and the United States.
Taiwanese Vice-Premier Cheng Li-chun said on Thursday that Taiwan’s negotiating team had never promised Washington to evenly split chip production.
“Taiwan has never made any commitment on a ‘50-50’ division, and we will not agree to such terms in the future,” Cheng said.
She added that rather than conceding ground on production capacity, her team was seeking consensus with the US on areas such as supply-chain cooperation and preferential tariff treatment.
She said that trade talks with US officials in Washington in the past week had focused on what Taipei has dubbed the “Taiwan model” – a strategic partnership that would allow the island’s technology industry to remain rooted at home while supporting expansion abroad.
She said the model had four pillars: allowing firms to decide their own investment strategies with government support; creating financial guarantee mechanisms to encourage funding; drawing on Taiwan’s experience in developing science parks to foster industry clusters in the US; and securing commitments from Washington on land, utilities, regulations and visas.


Cheng’s comments came after Lutnick said on Sunday that chip output should be split evenly between the US and Taiwan – comments that drew alarm in Taipei, where semiconductors are viewed as the island’s “silicon shield” against potential attacks from Beijing.
Opposition figures were quick to seize on the controversy. On Thursday, Hsieh Lung-chieh, a legislator of the main opposition Kuomintang (KMT), accused the government of withholding details of the talks, leaving industry players in the dark.
“Information about the negotiations is not transparent, so the industry cannot respond effectively. This could seriously affect Taiwan,” he said.
Mocking the government’s refusal to accept a “50-50” split, he asked: “So is it 60-40 instead?”
KMT chairman Eric Chu Li-luan said that handing half of Taiwan’s chip capacity to the US would “destroy the silicon shield”.
While stressing that Taiwan’s political stance was pro-American, he argued there were limits.
“Taiwan will never hand over TSMC. No one can sell out Taiwan or destroy its silicon shield,” Chu said, referring to Taiwan Semiconductor Manufacturing Company, the world’s largest contract chip supplier.
Political commentator Jaw Shaw-kong also questioned whether Taipei’s strategy went beyond a flat rejection of US demands. “If not 50-50, is it 60-40? 70-30? If we disagree, will tariffs rise? What’s our plan? It cannot just be one sentence of ‘we disagree’,” he said.
Julian Kuo, another political commentator, argued that a de facto 50-50 situation existed already, pointing to TSMC’s US$165 billion investment in Arizona, which includes three fabrication plants. “At advanced process nodes, the US and Taiwan are already evenly split,” he noted.
Others warned of deeper risks. Former KMT legislator Chiu Yi said that under US pressure TSMC had already committed to four fabrication plants and a research and development centre in Arizona, with investments potentially rising to US$500 billion.
“[This could] hollow out Taiwan’s economy, force tens of thousands of engineers to emigrate, and trigger a brain drain that would erode domestic industries.”
Financial analyst Lance Wang said the Trump administration was now pushing a “1:1 chip rule”, requiring every imported chip to be paired with one made in America or face 100 per cent tariffs.
“This is not bluffing – it could become reality,” he warned in a social media post, adding that such a measure would fundamentally reshape the global semiconductor map and directly affect Taiwan’s competitiveness.


But some experts were more sceptical, noting that such a division was more aspirational than practical. “To achieve a 50-50 split between Taiwan and the US is extremely difficult,” said Chen Shin-horng, vice-president of the Chung-Hua Institution for Economic Research in Taipei.
Chen said that even with TSMC’s ongoing projects in Arizona, the plan could not be realised within Trump’s current term.
Analysts said that behind the dispute lay Taiwan’s strategic dilemma: how to maintain its global dominance in the semiconductor industry while responding to growing US pressure to shift production to American soil.
For Cheng, who has led Taiwan’s negotiating team through five rounds of face-to-face talks with Washington, the solution is in creating a partnership that preserves Taiwan’s central role in the supply chain.
Beijing regards Taiwan as part of China and has not ruled out the use of force to achieve unification. It has ramped up pressure on the island, including with military drills, since Taiwanese leader William Lai Ching-te took office last year and called Beijing a “foreign hostile force”.
Most countries, including the US – Taiwan’s main arms supplier and international backer – do not recognise the island as an independent state.
Washington, however, is bound by law to arm Taiwan for self-defence and opposes any unilateral attempt to change the status quo by force.


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Taiwan

Taiwan ‘won’t agree’ to 50-50 chip split with US, VP Cheng Li-chun says

Taiwan has rejected US suggestions that it divide chip manufacturing evenly with the US. Photo: Shutterstock

Has Lutnick signalled the end of Taiwan’s ‘silicon shield’ against Beijing?

US Commerce Secretary Howard Lutnick says the concentration of semiconductor production in Taiwan is a vulnerability for America. Photo: AP

The opposition has accused the government of “selling out” Taiwan’s most prized asset. Photo: EPA

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Mexico’s President Claudia Sheinbaum celebrates one year in office at Palacio Nacional in Mexico City on Wednesday. Photo: AFP

The US government has urged Mexico to help Washington reduce reliance on Chinese-made semiconductor chips. Photo: AFP

Mark Johnson, the chargé d’affaires at the US embassy in Mexico, speaks at the opening of the Mexico-US Semiconductor Forum in Mexico City last week. Photo: EPA

US Secretary of State Marco Rubio gives the thumbs up upon his arrival at Felipe Angeles International Airport in Mexico City last month. Photo: AFP

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Taipei’s controls on exports to South Africa were due to come into effect in November. Photo: Reuters

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The logo of TSMC is displayed at its fabrication plant in Kaohsiung, Taiwan. Photo: Reuters

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Island’s lead trade negotiator returns from trade talks to fears that the ‘silicon shield’ could be under attack


Island’s lead trade negotiator returns from trade talks to fears that the ‘silicon shield’ could be under attack.


Taiwan ‘won’t agree’ to 50-50 chip split with US, VP Cheng Li-chun says

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Island’s lead trade negotiator returns from trade talks to fears that the ‘silicon shield’ could be under attack

Island’s lead trade negotiator returns from trade talks to fears that the ‘silicon shield’ could be under attack