Taiwan just dismissed one of President Donald Trump’s most aggressive demands yet in the semiconductor standoff.

Last weekend, Commerce Secretary Howard Lutnick floated the idea on American television that half of chips for the U.S. market would need to be produced domestically.

Now Taiwanese Vice Premier Cheng Li-chiun, fresh from a round of tariff talks in Washington, has told reporters in Taipei that Taiwan had “never made any commitment to a 50-50 split on chips,” that “we did not discuss this issue during this round of talks” and Taiwan “would not agree to such conditions.”

Lutnick’s statement reflects a hardening Trump administration line on semiconductors, which it sees as a national-security weak spot given Taiwan’s dominance and China’s perceived claims to the island. In recent months , the White House has repeatedly threatened tariffs and floated a “1:1” rule requiring U.S. chipmakers to match every import with domestic output.

Semiconductor supply chains are among the most complex and contingent in the world. The U.S., at present, makes less than 10% of the world’s chips and almost none of the most advanced.

Meanwhile, Taiwan Semiconductor — or TSMC, the Taiwanese giant that produces the bulk of cutting-edge chips — has pledged $165 billion to U.S. buildouts centered in Arizona, even as $165 billion would represent years’ worth of the company’s total average capex spend. Yet the cost is not the only fact that strains credulity. Relocating not just production facilities but the dense, highly interwoven ecosystem of suppliers and materials would be a massive, likely generational effort.

Taiwanese officials have signaled they are open to tariff talks and incremental cooperation, but not to the radical reshoring the Trump White House has demanded.

“The semiconductor industry is highly complex and requires precise specialisation and division of labour. Given that each country has its own unique industrial strengths, there is no need for a single nation to fully control or monopolise all technologies globally,” one Taiwanese tech official said earlier this yea r, underscoring the limits of U.S. trade pressure.

For Taipei, the stakes go beyond economics, with its concentrated hold on the global chip market representing a 50-year national effort and seen as a “ silicon shield ” deterring Beijing from aggressive military action.