Taiwan is next week expected to announce that it plans to invest an additional US$20 billion to US$30 billion in the US as part of a bilateral trade agreement centered on semiconductors, artificial intelligence (AI) and energy, US Secretary of Commerce Howard Lutnick said yesterday.
Lutnick was speaking during an interview with CNBC’s Squawk Box, following the conclusion yesterday of the two-day G20 Innovation Ministerial in Chapel Hill, North Carolina. During the ministerial, Lutnick held discussions with AI leaders, including Nvidia Corp CEO Jensen Huang (黃仁勳).
Taiwanese companies are planning an additional US$20 billion in investments, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said at the Semicon Network Summit in Taipei yesterday.
Photo: AP
The figure was the result of a new assessment after the SelectUSA Investment Summit in May to determine which companies, aside from Taiwan Semiconductor Manufacturing Co (TSMC), might want to further their investments in the US, Kung said.
Meanwhile, Lutnick said that US President Donald Trump’s administration is drawing up plans to impose new tariffs on semiconductors, with companies that manufacture chips in the US possibly eligible for tariff relief.
When Trump first took office, the US accounted for less than 2 percent of global semiconductor production and is now heading toward 40 percent, Lutnick said, adding that it could hit 50 percent production by the end of Trump’s second term.
The US has now secured US$1.2 trillion in investment in domestic semiconductor production, while TSMC has expanded investment in its semiconductor factory in Arizona to US$265 billion, he said.
“We will be successful in semiconductors; they’re going to be built in America,” he said.
Semiconductor tariff policy is likely to mirror the administration’s efforts to boost domestic pharmaceutical production through tariff relief for companies that manufacture innovative pharmaceuticals in the US and most-favored nation treatment, Lutnick said.
Earlier this year, the US agreed to lower tariffs on Taiwanese goods from 20 percent to 15 percent. Under the deal, Taiwanese semiconductor, electronics manufacturing service, AI and energy companies would invest US$250 billion in the US, while the government pledged an additional NT$250 billion in credit guarantees to facilitate investment in the US by Taiwan’s semiconductor and information and communication technology sectors.
Lutnick said the Taiwan trade deal that he led earlier this year called for Taiwan to move 40 percent of its chip production to the US.
In February, Vice Premier Cheng Li-chiun (鄭麗君) said that the 40 percent goal was “impossible,” something she said she had “told the US side very clearly.”
Trump’s chip tariff policy would effectively mean, “If you build here, you don’t pay, but if you don’t build here, expect to pay to enter the greatest market in the world,” Lutnick said.
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