Taiwan Rejects 40% US Chip Relocation, TSMC Eyes $65 Billion Arizona Build
Taiwan’s negotiator said relocating 40% of its chip capacity to the U.S. by 2029 is impossible, even as TSMC commits $65 billion across three Arizona fabs. Taiwan will cut export tariffs to 15% and expand domestic capacity, while analysts foresee under 15% of its most advanced processes shifting stateside before 2027.
1. Taiwan Pushback on US Relocation Demand
Vice Premier Cheng Li-chiun told Washington that shifting 40% of Taiwan’s semiconductor output to the U.S. by 2029 is unfeasible, citing the island’s mature ecosystem built over decades. She emphasized that core R&D, supply chains and talent must remain in Taiwan to sustain industry leadership.
2. Tariff Reduction and Domestic Capacity Plans
Taiwan and the U.S. agreed to cut export tariffs on Taiwanese chip exports from 20% to 15%, boosting cost competitiveness. Concurrently, TSMC plans ongoing on-island expansion through new fabs and capacity upgrades to meet rising global demand.
3. Arizona Expansion Timeline and Analyst Views
TSMC is investing $65 billion to build three Arizona fabs, with the second facility slated for mass production in 2027 and the third still under construction. Analysts estimate less than 15% of its most advanced processes will shift stateside before late 2027 due to long ramp-up times.