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U.S.-Taiwan trade agreement exempts advanced semiconductors from 15% tariffs
Monday, January 12, 2026 at 09:04 PM
The Kaohsiung City Government confirmed that advanced semiconductors and related products will be exempt from the 15% tariff under the latest U.S.-Taiwan trade negotiations. This move supports the expansion of the local semiconductor 'S Corridor' and the development of TSMC's Fab 22, which has officially entered the mass production phase for 2nm (N2) process technology.
Context
The U.S. and Taiwan finalized a $500 billion trade agreement on January 15, 2026, to massively expand American semiconductor manufacturing. The deal includes $250 billion in direct investments from companies led by TSMC, paired with $250 billion in Taiwan government credit guarantees. In exchange, the U.S. is reducing import tariffs on Taiwanese goods from 20% to 15%, aligning the island's trade status with Japan and South Korea.
This capital influx aims to build a domestic chip ecosystem, with TSMC reportedly expanding its Arizona footprint to a total of 11 fabs. While the deal secures the U.S. supply chain for AI and automotive sectors, the most advanced production nodes will likely remain in Taiwan under the company’s "N-2" strategy. This historic investment signals a long-term shift in the global supply chain, with new capacity scaling through the early 2030s.
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