Taiwan will not agree to 50-50 chip production deal with US, negotiator says

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The vast majority of semiconductor chips are made in Taiwan.

PHOTO: AFP

TAIPEI - Taiwan will not agree to a deal with the United States for half of all semiconductor production to take place in the country, the island’s top tariff negotiator said on Oct 1 after returning home.

US Secretary of Commerce Howard Lutnick told US television network News Nation over the weekend that Washington’s pitch to Taiwan would be a 50-50 split in making chips, the vast majority of which are now made on the island.

Taiwan Vice Premier Cheng Li-chiun, who is leading the tariff talks with Washington, told reporters upon getting back to the island that she had not discussed the 50-50 idea suggested by the US during the talks.

“Our negotiating team has never made any commitment to a 50-50 split on chips. Rest assured, we did not discuss this issue during this round of talks, nor would we agree to such conditions,” she said, according to Taiwan’s official Central News Agency.

Neither the US Commerce Department nor the Office of the United States Trade Representative responded to requests for comment sent outside of US business hours.

Taiwan, home to the world’s biggest contract chipmaker TSMC, runs a large trade surplus with the United States. The island’s exports to the United States are currently subject to a 20 per cent tariff.

TSMC, whose business is surging on strong demand for artificial intelligence applications, is investing US$165 billion (S$212.9 billion) to build chip factories in the US state of Arizona, though the bulk of its production will remain in Taiwan.

Taiwan’s government