Taipei: United States Commerce Secretary Howard Lutnick’s call for a “50-50” split in semiconductor production may shift the island’s “silicon shield” to a shared U.S.-Taiwan resilience, a semiconductor industry expert argued on Monday.
According to Focus Taiwan, Lutnick told U.S. media Sunday that he is pushing Taiwan to adopt a “50-50” plan, in which Taiwan and the U.S. each produce 50 percent of the chips used by the American market. Liu Pei-chen, a researcher at the Taiwan Institute of Economic Research (TIER), explained that the concept of the “silicon shield” arose because Taiwan has long held over 90 percent of global advanced chip capacity, which could deter a Chinese invasion.
The U.S. has contended that sufficient domestic chip production is necessary to safeguard Taiwan. It has warned that if Taiwan’s output were disrupted by a conflict, Washington would lack the chips essential for military and economic operations, Liu said. This position suggests that the United States is effectively redefining the “silicon shield” from being “Taiwan-only” to a shared U.S.-Taiwan resilience.
The U.S. aims to achieve a certain level of domestic chip self-sufficiency, or at least a “50-50” shared production arrangement, as crucial to fulfilling its protective responsibilities without concern, Liu contended. The TIER researcher noted that Washington could pressure Taiwan Semiconductor Manufacturing Co. (TSMC) to accelerate U.S. fab construction and expand investment in America, with other supply chain companies potentially facing similar pressures.
Currently, TSMC is investing US$65 billion to build three advanced wafer fabs in Arizona, with the first having started commercial production in late 2024. In March, TSMC pledged to invest an additional US$100 billion in Arizona over the next few years to build three more fabs, two IC assembly plants and one research and development center. For Taiwan, Liu emphasized the main concern should be safeguarding its technological edge and intellectual property while balancing domestic R and D needs with the demand for talent at overseas fabs.
Since being elected, U.S. President Donald Trump has pushed to get more semiconductor manufacturing in the United States, threatening huge tariffs on chip-importing companies that do not manufacture some of the chips they use in the U.S. Separately on Monday, the Ministry of Economic Affairs stated that Taiwan’s trade talks with the U.S. are being coordinated by the Executive Yuan and remain ongoing, without providing any details. Regarding Lutnick’s remarks, the ministry said it cannot comment on the U.S. position, but mentioned that the matter would be handled cautiously.
