Taiwan just threw cold water on Washington's ambitious semiconductor strategy. Vice Premier Cheng Li-chiun flatly rejected a U.S. proposal to relocate 40% of Taiwan's chip supply chain, calling it "impossible" in a statement that threatens to reshape trade negotiations and exposes the geopolitical tensions underlying the global tech hardware ecosystem. The standoff puts billions in AI infrastructure investments and the supply chains for Apple, Nvidia, and AMD squarely in the crossfire.
Taiwan just delivered a diplomatic rebuke that reverberates across the entire global tech industry. Vice Premier Cheng Li-chiun told Washington that its proposal to relocate 40% of Taiwan's semiconductor supply chain is flatly "impossible," according to CNBC reports. The rejection comes as U.S. Commerce Secretary Howard Lutnick has been pushing Taiwan to dramatically reshape its chip manufacturing footprint as part of broader trade negotiations.
The stakes couldn't be higher. Taiwan controls over 60% of global semiconductor manufacturing and commands nearly 90% of the most advanced chip production through Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker. Companies like Apple, Nvidia, and AMD depend on TSMC's cutting-edge fabrication plants for the processors that power everything from iPhones to AI accelerators.
Washington's 40% relocation demand reflects growing anxiety about semiconductor supply chain concentration. The U.S. has spent years trying to reduce dependence on Taiwan-based chip production, driven by fears that a Chinese military action against the island could cripple the global tech economy overnight. The CHIPS and Science Act allocated $52 billion to boost domestic semiconductor manufacturing, but progress has been slow and expensive.
