In a nutshell: Taiwan has said it would be "impossible" to relocate a large percentage of its chip production to the US, but is open to the possibility of expanding its presence in America. Officials in Washington had previously floated the idea of moving nearly half of the country's chipmaking capacity to America, and threatened to significantly increase tariffs if it didn't happen.
During a recent interview with Taiwanese television channel CTS, Taiwan Vice Premier Cheng Li-chiun said she made it very clear to Washington that the country couldn't move 40 percent of its semiconductor manufacturing capacity to the US.
The Chinese chipmaker has spent decades building out its semiconductor footprint. At present, Taiwan accounts for around 90 percent of the globe's advanced semiconductor production. Uprooting a huge chunk of that capacity and moving it elsewhere would likely devastate the local economy, and simply doesn't seem like a logical ask by US officials.
Li-chiun said Taiwan's cutting edge technology would not be transferred to other countries, adding that it needs to continue locally for research and development purposes. While open to the possibility of international expansion, Li-chiun said that possibility is based on the premise that they remain firmly rooted in Taiwan and continue to invest locally.
Last week, US Secretary of Commerce Howard Lutnick said it was illogical to have all semiconductor manufacturing "80 miles from China." As such, he said his goal before leaving office is for the US to have a 40 percent market share in leading-edge semiconductor manufacturing.
Despite the impasse, the two sides have cooperated as of late. Last month, the US agreed to lower tariffs on Taiwan exports from 20 percent to 15 percent. Conversely, Taiwan agreed to increase its investment in the US. And the world's largest contract chipmaker, TSMC, is already working on $165 billion worth of factories in Arizona.
Full terms and conditions of the tariff agreement are expected to be released in the coming weeks. For now, it seems most of Taiwan's manufacturing expertise is staying put.