Taiwan says 'impossible' to move 40 percent chip capacity to US

Taiwan's top tariffs negotiator said it would be "impossible" to shift 40 percent of its semiconductor production capacity to the United States as she rejected claims that the island's chip industry would relocate.

Taiwan is a powerhouse in producing chips -- a critical component in the global economy -- but the White House wants more of the technology made in America.

Washington agreed in a deal last month to lower tariffs on the island's goods to 15 percent from 20 percent, while Taiwan will increase its investment in the US.

US Commerce Secretary official Howard Lutnick said last month that Washington wanted to shift up to 40 percent of Taiwan's chip supply chain and production to the US, warning tariffs could rise sharply if that did not happen.

That came after he told US media in September that Taiwan's chip production should be split "50-50" with Washington.

But in an interview broadcast late Sunday by Taiwanese television channel CTS, Vice Premier and lead negotiator Cheng Li-chiun said she had made it clear to US officials that Taiwan's semiconductor ecosystem would not be relocated.

With regards to "40 or 50 percent of production capacity (being) moved to the United States... I have made it very clear to the US side that this is impossible," Cheng said.

She added that Taiwan's semiconductor ecosystem was like an "iceberg", the foundation beneath the water is "enormous", adding that "an industrial ecosystem built up over decades cannot be relocated."

She said "it will only continue to grow larger".