Washington: Washington’s goal of shifting 40 percent of Taiwan’s semiconductor supply chain to the United States within President Donald Trump’s term is “not physically possible,” a U.S. expert said on Friday.

According to Focus Taiwan, tech industry analyst Bob O’Donnell noted that while there is a gradual shift toward increasing manufacturing in the U.S., the logistics and complexity of the semiconductor industry suggest that achieving such a goal could take years, if not decades. O’Donnell, the founder of TECHnalysis Research in California, emphasized the intricate nature of semiconductor supply chains, suggesting that unrealistic estimates often arise from a lack of understanding of these complexities.

O’Donnell characterized the claims from Washington as “exaggerations” from the Trump administration. These statements, he argued, are likely intended to boost confidence among firms about the government’s ability to sustain the long-term shift of production to the U.S. He highlighted the importance of mom
entum, explaining that the current trend is steering more semiconductor manufacturing to the U.S., which in turn encourages other companies to follow suit.

On the trade negotiations front, Taiwan’s Executive Yuan announced that the U.S. has agreed to lower tariffs on Taiwanese goods from 20 percent to 15 percent, without adding them to existing most-favored-nation rates. This agreement follows the latest round of trade talks in Washington and includes a commitment from Taiwanese semiconductor and technology companies to invest at least US$250 billion directly in the U.S. Taiwan’s government will also provide up to US$250 billion in credit guarantees to support other investments.

The specifics of the US$250 billion investment commitment remain unclear, particularly whether it includes the US$165 billion that Taiwan Semiconductor Manufacturing Co. has already pledged to invest in the U.S.

U.S. Secretary of Commerce Howard Lutnick, in an interview with CNBC, asserted that 40 percent of Taiwan’s supply chain c
ould be reshored to the U.S. by the end of Trump’s term in 2029. However, opposition figures and critics in Taiwan have raised concerns that substantial Taiwanese investment in the U.S. might deplete domestic production capabilities and potentially weaken Taiwan’s critical semiconductor industry, which is seen as a deterrent against potential aggression from China.