The recent agreement between the US and Taiwan has paved the way for a significant investment in American chip manufacturing. The Commerce Department revealed that Taiwan will see a reduction in tariffs from 20 to 15 percent, while Taiwanese tech firms are set to inject $250 billion into constructing and enhancing chipmaking facilities in the US. This move comes with the backing of a substantial credit line from Taiwan’s government.
The deal stems from previous threats by the US administration regarding imposing hefty tariffs on chips and semiconductors not produced in the US. Commerce Secretary Howard Lutnick emphasized the importance of maintaining chip production within America, hinting that a 100 percent tariff could still be in play for non-compliant entities. The agreement also includes provisions allowing Taiwanese companies to import materials during the construction phase without incurring additional tariffs and subsequent benefits post-construction.
When asked about potential risks from China, Lutnick highlighted Taiwan’s motivation to satisfy the US administration, particularly emphasizing the importance of the US government’s support. Taiwan Semiconductor Manufacturing Co., a major player in the chipmaking industry, had already committed $100 billion towards expanding chip production.
Source: The Verge