In an effort to restore Taiwan’s leadership in semiconductor manufacturing, the country has entered into a major trade deal with the U.S. This deal would also help lower tariffs previously imposed by American President Donald Trump.
In a fact sheet, the U.S. Department of Commerce (DoC) explained the agreement involves Taiwan-based chip and technology companies investing $250 billion to expand advanced semiconductor, energy and AI operations in the U.S.
Taiwan’s government agreed to guarantee another $250 billion to drive further investments by domestic companies.
In return, the U.S. reciprocal tariff rate applied to Taiwanese goods was capped at 15 per cent, down from 20 per cent. The U.S. also agreed to a 0 per cent reciprocal tariff for generic pharmaceuticals and their ingredients, aircraft components and some natural resources.
Future tariffs under the Section 232 framework would allow exceptions for Taiwan-based companies building chips in the U.S., which may import up to two-and-a-half-times the amount of planned capacity they are building without paying.
CNBC reported U.S. Secretary of Commerce Howard Lutnick said TSMC bought “hundreds of acres” of additional land in Arizona, where it is investing around $65 billion in three greenfield fabrication facilities.
The DoC stated the U.S.’ share of global wafer fabrication declined from 37 per cent in 1990 to less than 10 per cent in 2024. It blamed “foreign industrial policies that distort global trade flows” for resulting in most production now taking place in East Asia.
Source: Mobile World Live
Image Credit: Stock Image
