"50-50" chip manufacturing proposal from U.S. sparks backlash in Taiwan

TAIPEI/BEIJING, Sept. 30 (Xinhua) -- A recently revealed semiconductor production idea, proposed by the United States, has aroused severe backlash in Taiwan.

According to U.S. Secretary of Commerce Howard Lutnick, who discussed the idea in an interview, the Trump administration is pushing Taiwan to shift investment and chip production to the United States, so that the latter can manufacture half of its chips domestically.

Lutnick also noted that the United States has held discussions with Taiwan's Democratic Progressive Party (DPP) authorities about the "50-50" split in semiconductor production, and indicated that it would significantly reduce U.S. dependence on Taiwan in this regard.

It's bad for the United States that "95 percent of our chips are made 9,000 miles away," while China is not being "shy" about threats to "take" Taiwan, Lutnick said.

Lutnick's revelation of the proposal was immediately met with strong pushback in Taiwan. Several media outlets on the island published articles condemning the proposal, calling it a pretext for the United States to exploit, and warning that it could severely harm the island's economy and the livelihoods of its people.

According to the Taipei-based China Times, netizens have expressed strong displeasure with the proposal, with some calling it almost an outright robbery.

Certain scholars and political figures have also reacted strongly against the proposal. Liu Da-nien, a scholar with Taiwan-based Chung-Hua Institution for Economic Research, said that the proposal is neither fair nor practical.

Liu noted that Taiwan's semiconductor manufacturing giant Taiwan Semiconductor Manufacturing Co. (TSMC) has already agreed to invest 165 billion dollars to build plants in the U.S. state of Arizona, its biggest overseas investment to date. However, the lack of skilled professionals in the United States is already emerging as a challenge, even before the plants become operational.

Under such circumstances, it is virtually impossible for the United States to boost its chip production capacity, Liu said.

It is common for the U.S. side to implement policies aimed at curbing countries or regions that excel economically or in specific sectors, said Darson Chiu, an adjunct professor at Taiwan's Tunghai University.

He noted that today's high demand for chips is the result of years of effort by Taiwan's industries and supply chains, yet the United States is using all means to undermine this status. The "50-50" proposal, he said, is essentially a sugar-coated form of blackmail that will harm both the island and TSMC.

Semiconductors are the lifeline of Taiwan's economy, and the distribution of production capacity must be reasonable, said Lai Cheng-i, honorary chairman of Taiwan's general chamber of commerce. He added that shifting 50 percent of Taiwan's semiconductor production capacity to the U.S. is against the principles of free trade.

Speaking of the possible outcomes of the proposed idea, Lai pointed out that should semiconductor production capacity or supply chain shift to the United States, Taiwan will likely lose 200,000 high-tech professionals and more than 1 million high-spending consumers, and thus take a heavy blow to its economy.

Some experts have slammed the DPP authorities for their "near-complete" pandering to the United States, and warned against forfeiting the island's benefits.

Tseng Hsien-ying, a former TSMC engineer, noted that the DPP authorities' full compliance with U.S. demands puts Taiwan at a disadvantage in the development of key production capacities and supply chains.

In fact, peace and stability are the best industrial policies, said Tseng, adding that in response to the "50-50" proposal, the DPP authorities must adopt measures that ease tensions with the Chinese mainland while safeguarding the island's technological foundation and jobs through practical, peace-oriented actions.