Taipei aims to become a close strategic partner of Washington in artificial intelligence (AI) after striking a deal to cut tariffs and boost investment in the US, Vice Premier Cheng Li-chiun (鄭麗君) said yesterday.
The administration of US President Donald Trump has pushed Taiwan, a major producer of semiconductors, to invest more in the US, specifically in chips that power AI.
“In this negotiation, we promoted two-way Taiwan-US high-tech investment, hoping that in the future we can become close AI strategic partners,” said Cheng, who led the talks that clinched Thursday’s trade deal, which cuts tariffs on many of Taiwan’s exports and directs new investments in the US’ technology industry.
Photo: Cheng I-hwa, AFP
US Secretary of Commerce Howard Lutnick said Taiwanese companies would invest US$250 billion to boost the production of semiconductors, energy and AI in the US.
The figure includes US$100 billion already committed by chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) last year, with more to come, he added.
Cheng called the deal “win-win,” saying that it would also encourage US investment in Taiwan.
Photo: screen grab from Lutnick’s X account
The investment plan is up to the company, rather than driven by the government, and Taiwanese companies would continue to invest at home, she added.
“We believe [the goal of] this supply-chain cooperation is not ‘move,’ but ‘build.’ We expand our footprint in the US and support it in building local supply chains, but even more so, it is an extension and expansion of Taiwan’s technology industry,” Cheng said.
A memorandum of understanding (MOU) was signed on the investment commitments and a more formal trade pact would be signed in the coming weeks, she added.
The MOU did not provide a timeline on when the US$250 billion investment pledge would have to be fulfilled.
The US said Taiwan would also guarantee an additional US$250 billion in credit to facilitate further investment.
There have been concerns that Taiwanese semiconductor companies investing heavily in the US would hollow out the nation’s domestic industry and weaken the “silicon shield” that protects it from a Chinese attack.
Cheng did not say whether the deal would reduce US dependence on Taiwan, but said she did not believe the increased investment would hurt the Taiwanese semiconductor industry.
“While every country pursues its own national security goals, Taiwan’s priority is to support the international expansion and extension of its high-tech industries,” she said. “This is not an industrial relocation, but an extension and expansion of Taiwan’s technology sector.”
The sector’s output has grown at home while semiconductor companies have expanded their overseas investment footprint, Cheng said.
TSMC in a statement said it welcomed the prospect of “robust” trade pacts between Taiwan and the US, adding that all its investment decisions were based on market conditions and customer demand.
“The market demand for our advanced technology is very strong,” it said. “We continue to invest in Taiwan and expand overseas.”
Lutnick said the objective was to bring 40 percent of Taiwan’s chip supply chain and production to the US.
If they were not built in the US, the tariff would likely be 100 percent.
Additional reporting by CNA
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