Commerce Secretary Howard Lutnick said Saturday that a major semiconductor deal with Taiwan is coming “pretty soon,” signaling a potential breakthrough in U.S. efforts to shore up domestic chip production and reduce reliance on a single, geopolitically vulnerable supplier. The comment came during an interview with NewsNation, where he also set an ambitious target of increasing U.S. chip production to 40% of national needs before he leaves office.
Speaking about “... countries that need to react correctly to America,” in reference to U.S. trade policy, Lutnick said, “You still have Taiwan. That’s a big one that’s coming, I think, pretty soon. I expect to really be talking to them and sorting that out.”
Lutnick framed the stakes in blunt geopolitical terms. “The Chinese have said, ‘we’re going to take Taiwan,’” he told NewsNation. “They’re not even shy about it.” That threat, he says, is exactly why semiconductor manufacturing cannot remain concentrated on “an island 80 miles from mainland China” that makes “95% of our chips.”
These comments echo long-standing concerns about overdependence on Taiwan’s advanced foundries, particularly TSMC, which produces around 90% of the world’s leading-edge chips below 10nm. But the 95% claim could overstate Taiwan’s overall role. While the island is essential for high-performance CPU and GPU silicon, it accounts for around 44% of logic chips and 24% of memory chips that enter the U.S. market, according to a November 2023 working paper published by the U.S. International Trade Commission.
Still, the Trump administration is pushing hard to increase domestic manufacturing. The CHIPS and Science Act, passed under the Biden administration, is now being reinterpreted through a harsher lens. A proposed 1:1 chip rule would require companies to match every imported chip with one made domestically or face 100% tariffs, a major pivot from subsidies to leverage as U.S. officials seek lasting supply chain independence.
Lutnick’s comments concerning a Taiwan deal suggests the administration is now looking to formalize or expand its partnership with TSMC, which is already building two fabs in Arizona and, in March, pledged $100 billion toward U.S. investments over five years. That includes packaging and R&D infrastructure, but not yet a commitment to bring its most advanced 2nm-class platforms to the U.S.
If — and it’s a big if — an upcoming deal leads to TSMC bringing state-of-the-art node production to the U.S., it would mark a monumental shift in where leading-edge silicon is fabricated. TSMC is already producing N4 chips at its Arizona facility and plans to support N3 and then N2 by 2028-2029 at Fab 21, but locking in leading nodes will be tricky.
Taiwan’s government has already signaled resistance to transferring its most advanced technology abroad, saying that it will ensure TSMC will “keep its most advanced manufacturing processes in Taiwan” under the proposed N-1 policy.
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