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US and Taiwan Announce $500 Billion Semiconductor Investment Deal
Published: 2026/01/15 21:15:00
The United States and Taiwan have formalized a significant agreement involving over $500 billion in investments aimed at bolstering semiconductor manufacturing and technological innovation. This deal,announced by the U.S. Department of Commerce on January 15, 2026, seeks to strengthen U.S. domestic semiconductor production, reduce reliance on foreign supply chains, and advance capabilities in artificial intelligence (AI). The agreement comes amidst increasing concerns about geopolitical risks and supply chain vulnerabilities in the critical semiconductor industry.
Key Components of the Deal
Taiwanese Investment in the US
Taiwanese semiconductor and technology companies have committed to direct investments totaling $250 billion into the U.S. semiconductor industry. This investment will span across semiconductors themselves, as well as related areas like energy and AI production and innovation – with the goal of building a resilient and competitive supply chain. U.S. Department of Commerce officials emphasized the strategic importance of this collaboration.
Credit Guarantees
In addition to direct investments, Taiwan will provide $250 billion in credit guarantees to further incentivize investments from Taiwanese semiconductor and tech enterprises within the United States. This financial backing is designed to reduce risk and accelerate the deployment of capital into critical projects.
US Investment in Taiwan
Reciprocally, the U.S. will invest in Taiwan’s semiconductor, defense, AI, telecommunications, and biotech industries. while a specific dollar amount for the U.S. commitment hasn’t been publicly disclosed, the investment aims to strengthen Taiwan’s economic and technological foundations, ensuring its continued leadership in semiconductor manufacturing. Reuters reports that these investments are envisioned as part of a broader strategy to de-risk supply chains and enhance economic security for both nations.
Addressing Semiconductor supply Chain Risks
This agreement acknowledges the critical importance of semiconductors to the modern economy and national security.Currently, Taiwan accounts for more than 50% of global semiconductor production, with a significant concentration of advanced chip manufacturing within the island nation. The U.S. currently produces only around 10% of the world’s semiconductors, creating a significant dependence on foreign suppliers.
The proclaimed dependence is considered a vulnerability,as disruptions to the supply chain could considerably impact U.S.industrial and military capabilities. the new deal looks to redress this imbalance and foster a more diversified and secure semiconductor ecosystem.
Tariffs on AI Chips
Coinciding with the announcement of the Taiwan deal, the U.S. government also published a proclamation instituting a 25% tariff on certain advanced AI chips destined for China. This move, as reported by TechCrunch,is part of a broader effort to restrict China’s access to cutting
