Taiwan Rejects U.S. Chip Production Shift Proposal
Taiwan has declined a U.S. proposal to shift half of its chip manufacturing to American soil. The move comes amidst ongoing negotiations for a high-tech strategic partnership, dubbed the 'Taiwan Model'.
Taiwan's rejection follows a U.S. proposal for a 1:1 rule, requiring chipmakers to produce locally what they export. However, Taiwanese semiconductors already enjoy certain tariff exemptions. Taiwan seeks to extend these exemptions and ease visa and land acquisition processes for its citizens in the U.S.
The two nations are nearing a deal that would balance Taiwan's domestic chip production with foreign investment. Taiwan plans to keep advanced chip production local, despite U.S. concerns about its proximity to mainland China. U.S. Commerce Secretary Howard Lutnick has voiced worries about China's intentions towards Taiwan. In exchange for Taiwan's cooperation, the U.S. will offer land, visas, and improved regulations to support Taiwanese investment.
Taiwan's refusal to move half its chip manufacturing to the U.S. signals its intent to maintain a balance between domestic production and foreign investment. The U.S., in turn, is set to provide incentives to encourage Taiwanese investment. Both sides are working towards finalizing a semiconductor deal that suits their respective interests.
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