Taiwanese trade negotiators told Washington that Taipei would not relocate 40 percent of its semiconductor production to the US, and that its most advanced technologies would remain in the nation, Vice Premier Cheng Li-chiun (鄭麗君) said on Sunday.
“I told the US side very clearly — that’s impossible,” Cheng, who led the negotiation team, said in an interview that aired on Sunday night on Chinese Television System.
Cheng was referring to remarks last month by US Secretary of Commerce Howard Lutnick, in which he said his goal was to bring 40 percent of Taiwan’s chip supply chain to the US
Photo: screen shot from CTS television channel’s livestream
Taiwan’s almost 90 percent market share of advanced semiconductor production was the result of an ecosystem developed over several decades and could not be “moved” to the US, Cheng said.
“I told the US side, we can’t distribute production capacity, but we can expand our layout in the US,” she said.
Cheng also defended the broad outline of the agreement with the US, under which Washington would lower tariffs on Taiwanese goods from 20 percent to 15 percent, placing Taiwan on an equal footing with competitors such as Japan, South Korea and the EU.
In return, Taiwanese semiconductor and tech companies would invest US$250 billion in the US based on their own plans, while the Taiwanese government would provide US$250 billion in credit guarantees to facilitate the investments.
The structure of the deal — independent investment by companies combined with government financial guarantees — was an example of the “Taiwan model,” and differed from the investment pledges made by Japan and South Korea, she said.
It also means that Taiwan and the US will have to work together, using the Taiwan model, to build supply chains and meet their strategic goals, she said.
Taiwan’s science parks would not be relocated to the US, she said, adding that she had made it clear during negotiations that Taiwan’s most advanced semiconductor technology would not be transferred to other countries.
“It needs to be carried out in Taiwan, where there is a comprehensive ecosystem for continuous research and development [R&D],” Cheng said.
Taiwanese semiconductor companies “will only rationally expand their investments to other countries after they have set up factories in Taiwan and confirmed they can mass produce,” Cheng said.
For that reason, the most advanced R&D and manufacturing processes must be “carried out first in Taiwan,” she added.
Taiwanese and US officials are expected to sign and release the full terms of the tariff agreement in the coming days or weeks.
The deal must then be sent to the opposition-controlled Legislative Yuan for approval.
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