Taiwan has strongly rejected calls from the United States to relocate a significant portion of its semiconductor production, stating that moving 40% of the island’s chipmaking capacity to the U.S. is “impossible.” The comments, delivered by senior Taiwanese officials this week, underline the challenges of reshaping global supply chains for one of the world’s most critical and technologically advanced industries.
Taiwan is home to the majority of the world’s advanced semiconductor manufacturing, including the most sophisticated logic chips used in smartphones, automobiles, and artificial intelligence hardware. Decades of investment, specialized infrastructure, and a dense network of suppliers and engineers have created an ecosystem that is difficult to replicate elsewhere. Taiwanese officials say that uprooting even a fraction of this system would be an enormous undertaking, both technically and economically.
In a recent statement, Taiwan’s Vice Premier emphasized that while Taiwanese companies are willing to expand production abroad, relocating existing capacity on the scale suggested by U.S. policymakers is unrealistic. “We cannot simply move our most advanced production lines overseas,” the Vice Premier said. “The complexity, precision, and interdependence of our semiconductor ecosystem make it impossible to transfer 40% of our capacity to the United States.”
The remarks come after U.S. officials highlighted their goal of capturing a larger share of global semiconductor manufacturing in order to reduce reliance on foreign suppliers. In particular, Washington has been pushing for significant investment in domestic chip production, citing both economic and national security concerns. The U.S. sees Taiwan’s semiconductor expertise as crucial to meeting these ambitions and has sought closer collaboration with Taiwanese firms to expand capacity on American soil.
Despite these efforts, Taiwanese authorities are clear that expansion abroad should supplement domestic production rather than replace it. Taiwanese semiconductor leaders are investing heavily in overseas facilities, including large-scale projects in the United States. However, these expansions are intended to add capacity, transfer technology, and share expertise, rather than to relocate the core operations that drive innovation and maintain the island’s competitive edge.
Industry analysts note that replicating Taiwan’s semiconductor ecosystem would be a massive challenge. It is not just a matter of building new factories; advanced chip manufacturing relies on years of accumulated knowledge, supply chain networks, skilled labor, and specialized equipment. Even with substantial investment, moving production to the U.S. on the scale of 40% would take years, if not decades, and might still fall short of matching the efficiency and quality of Taiwan’s existing facilities.
The Taiwanese government has stressed that retaining its semiconductor base at home is essential for both economic and strategic reasons. The industry represents a cornerstone of the nation’s economy, generating jobs, fostering technological innovation, and maintaining Taiwan’s global influence in high-tech sectors. Officials argue that weakening domestic production could have long-term consequences for economic growth, technological leadership, and national security.
At the same time, Taiwan is committed to international collaboration and sharing its expertise with partners abroad. Officials have indicated that they are open to supporting U.S. efforts to build a domestic semiconductor ecosystem, including training engineers, transferring knowledge, and helping to establish supply chains. Such collaboration, however, would complement rather than replace Taiwan’s existing production.
The dispute also highlights a broader global dilemma. Governments around the world are seeking to diversify semiconductor production to avoid overreliance on a single country or region. Supply chain disruptions, geopolitical tensions, and trade disputes have all underscored the vulnerabilities of concentrating critical industries in one location. The U.S., along with Europe and Japan, has proposed incentives to encourage domestic chip production, while Taiwan emphasizes that its expertise and existing infrastructure cannot be easily relocated.
The Taiwanese stance has implications for the semiconductor industry worldwide. It suggests that while overseas investments and joint ventures can expand global production, the majority of cutting-edge chip manufacturing will remain concentrated in Taiwan for the foreseeable future. Analysts predict that less than 15% of Taiwan’s most advanced processes could shift to U.S. facilities over the next decade, even with ambitious investment plans.
Public reactions in Taiwan have been largely supportive of the government’s position. Many citizens and business leaders view the semiconductor industry as a vital national asset that must be protected. There is broad consensus that while international cooperation is valuable, Taiwan’s economic and technological independence depends on keeping the core of its chipmaking operations on the island.
U.S. officials, for their part, continue to press for increased collaboration and have welcomed Taiwanese investments in American facilities. Both sides have agreed that building resilience in the semiconductor supply chain is a shared priority. Still, the gap between ambitious U.S. relocation targets and the practical realities of Taiwan’s production capacity remains substantial.
As global demand for semiconductors continues to grow, Taiwan’s position underscores the tension between national security concerns and the realities of complex, specialized industries. While the United States seeks to expand its domestic capabilities, Taiwan emphasizes that its decades of expertise and carefully cultivated ecosystem cannot be replicated overnight.
For now, the message from Taipei is clear: Taiwan is willing to support and collaborate with international partners, but the heart of its semiconductor industry will remain on the island. Expansion abroad is welcome, but wholesale relocation of production is simply not feasible. This position highlights the importance of Taiwan’s semiconductor leadership in shaping the future of global technology and the challenges policymakers face in balancing ambition with reality.
