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Trump again criticises Taiwan for taking semiconductor

business

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Taiwan president pledges more investment in United States

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Taiwan plans to raise defence spending, president says

(Updates February 14 story to add TSMC declining to comment,

paragraph 12)

By Yimou Lee and Ben Blanchard

TAIPEI, Feb 14 (Reuters) - Taiwan President Lai Ching-te

pledged on Friday to talk with the United States about President

Donald Trump's concerns over the chip industry and to increase

U.S. investment and buy more from the country, while also

spending more on defence.

Trump spoke critically about Taiwan on Thursday, saying he

aimed to restore U.S. manufacturing of semiconductor chips and

repeating claims about Taiwan having taken away the industry he

wanted back in the United States.

Speaking to reporters after holding a meeting of the

National Security Council at the presidential office, Lai said

that the global semiconductor supply chain is an ecosystem in

which the division of work among various countries is important.

"We of course are aware of President Trump's concerns," Lai

said.

"Taiwan's government will communicate and discuss with the

semiconductor industry and come up with good strategies. Then we

will come up with good proposals and engage in further

discussions with the United States," he added.

Democratic countries including the United States should come

together to build a global alliance for AI chips and a

"democratic supply chain" for advanced chips, Lai said.

"While admittedly we have the advantage in semiconductors,

we also see it as Taiwan's responsibility to contribute to the

prosperity of the international community."

Taiwan is home to the world's largest contract chipmaker,

TSMC, a major supplier to companies including Apple ( AAPL )

and Nvidia ( NVDA ), and a crucial part of the

developing AI industry.

TSMC is investing $65 billion in new factories in the U.S.

state of Arizona, a project begun in 2020 under Trump's first

administration.

TSMC's Taipei-listed shares closed down 2.8% on Friday,

underperforming the broader market, which ended off

1.1%.

A senior Taiwan security official, speaking to reporters on

condition of anonymity in order to speak more freely, said if

TSMC judged it was feasible to increase its U.S. investment,

Taiwan's government would help in talks with the United States.

TSMC declined to comment.

The official added that communications between Taiwan and

U.S. economic, security and defence officials at present was

"quite good" and "strong support from the United States can be

felt".

US SUPPORT

The United States, like most countries, has no formal

diplomatic ties with Chinese-claimed Taiwan, but is the

democratically governed island's most important international

backer and arms supplier.

Trump cheered Taiwan last week after a joint U.S.-Japan

statement following Japanese Prime Minister Shigeru Ishiba's

visit to Washington called for "maintaining peace and stability

across the Taiwan Strait", and voiced support for "Taiwan's

meaningful participation in international organisations."

But Taiwan also runs a large trade surplus with the United

States, which surged 83% last year, with the island's exports to

the U.S. hitting a record $111.4 billion, driven by demand for

high-tech products such as semiconductors.

Lai said that the United States is Taiwan's largest foreign

investment destination and that Taiwan is the United States'

most reliable trade partner.

Trump has also previously criticised Taiwan, which faces a

growing military threat from China, for not spending enough on

defence, a criticism he has made of many U.S. allies.

"Taiwan must demonstrate our determination to defend

ourselves," Lai said, adding his government is working to

propose a special budget this year to boost defence spending

from 2.5% of its GDP to 3%.

His government is involved in a standoff with parliament,

where opposition parties hold a majority, over cuts to the

budget, including defence spending.

"Certainly, more and more friends and allies have expressed

concern to us, worried whether Taiwan's determination for its

self-defence has weakened," Lai said.