TAIPEI, Oct 1 (Reuters) - Taiwan will not agree to a

deal with the United States for half of all semiconductor

production to take place in the country, the island's top tariff

negotiator said on Wednesday after returning home.

U.S. Secretary of Commerce Howard Lutnick told U.S.

television network News Nation over the weekend that

Washington's pitch to Taiwan would be a 50-50 split in making

chips, the vast majority of which are now made on the island.

Taiwan Vice Premier Cheng Li-chiun, who is leading the

tariff talks with Washington, told reporters upon getting back

to the island that she had not discussed the 50-50 idea

suggested by the U.S. during the talks.

"Our negotiating team has never made any commitment to a

50-50 split on chips. Rest assured, we did not discuss this

issue during this round of talks, nor would we agree to such

conditions," she said, according to Taiwan's official Central

News Agency.

Neither the U.S. Commerce Department nor the Office of the

United States Trade Representative responded to requests for

comment sent outside of U.S. business hours.

Taiwan, home to the world's biggest contract chipmaker TSMC

, runs a large trade surplus with the United States.

The island's exports to the United States are currently subject

to a 20% tariff.

TSMC, whose business is surging on strong demand for

artificial intelligence applications, is investing $165 billion

to build chip factories in the U.S. state of Arizona, though the

bulk of its production will remain in Taiwan.

Taiwan's government said last month that it hoped for a more

favourable tariff rate from the United States after talks

achieved "certain progress".

Speaking in parliament in Taipei on Tuesday, Premier Cho

Jung-tai said Cheng had had multiple talks with the United

States on tariff issues.

"The most critical substantive consultations are currently

underway," he said.

Cheng, speaking at the airport, said that "detailed"

discussions had taken place which yielded "certain progress",

the Central News Agency added.