TAIPEI (Taiwan News) — A semiconductor deal with Taiwan is progressing, US Commerce Secretary Howard Lutnick said on Sunday.
In an interview with NewsNation, Lutnick said the agreement is coming “pretty soon” and aims to bring more chip production to the US. “We need to make our own chips,” he said, adding that the US seeks to make 40% of the world’s semiconductors.
This would require approximately US$500 billion (NT$15.23 trillion) in investments, Lutnick said. With Taiwan’s help, the US could attain “reasonable self-sufficiency” in chip manufacturing.
Lutnick revealed that during talks, he suggested Taiwan relinquish half of its chip production to the US in return for defense support.
Splitting production in half is vital for Taiwan’s security, the secretary argued. “If you have 95% (of global semiconductors), how am I going to get it to protect you?”
Though the country is a semiconductor powerhouse, Lutnick's claim that Taiwan makes 95% of the world's chips is inaccurate, per a Tom's Hardware report. According to a 2023 US International Trade Commission working paper, Taiwan produces around 44% of logic chips and 24% of memory chips that the US imports.
Taiwan Semiconductor Manufacturing Company already has one operational four-nanometer chip fab and another one scheduled to begin making 3 nm chips in 2028 in Arizona. The company broke ground in April for a third fab in the state, which will produce 2 nm and A16 process chips by 2029.
TSMC also has one fab in Washington state, as well as design service centers in Texas and California. In March, it pledged to invest an additional US$100 billion to build three new fabrication plants, two advanced packaging facilities, and an R&D team center at its Arizona facility.
Despite such significant investments, Taiwan is unwilling to share its most advanced chip technology abroad. In March, Presidential Office Spokesperson Karen Kuo (郭雅慧) said the government would ensure TSMC “will keep its most advanced manufacturing processes in Taiwan” under the N-1 policy, which requires foreign fabs to be at least one generation behind.
In April, an amendment to Article 22 of the Statute for Industrial Innovation passed its third reading. It stipulated that Taiwanese companies caught making unauthorized foreign investments face fines of up to NT$10 million. It also allows the government to block projects threatening national security or economic stability.
