Taiwan is positioning itself to become a strategic partner with the United States in artificial intelligence (AI), following a landmark trade and investment agreement designed to bolster technology collaboration and semiconductor production, Taiwan Vice Premier Cheng Li-chiun said Friday.
The deal, finalized Thursday, comes as the Trump administration has urged Taiwan—a global leader in semiconductor manufacturing—to increase its investment in the United States, particularly in technologies driving the AI revolution. The arrangement is expected to lower tariffs on a wide range of Taiwanese exports while also channeling substantial Taiwanese capital into the U.S. technology sector.
Under the agreement, Taiwanese companies have pledged to invest $250 billion in the United States, targeting expansion in semiconductors, energy, and AI development. This figure includes $100 billion already committed by chipmaker TSMC in 2025, with additional investments expected in subsequent years, according to U.S. Commerce Secretary Howard Lutnick. In addition, Taiwan will provide an extra $250 billion in credit support to facilitate further corporate investment in the U.S. technology ecosystem.
Vice Premier Cheng, who led the Taiwanese delegation in Washington, described the deal as mutually beneficial for both nations. Speaking at a press conference livestreamed from the U.S. capital, she emphasized that the agreement would not only increase Taiwanese investment in the United States but also encourage reciprocal U.S. investment in Taiwan, reinforcing the strong economic and strategic ties between the two partners.
“In this negotiation, we promoted two-way Taiwan–U.S. high-tech investment, hoping that in the future we can become close AI strategic partners,” Cheng said.
The deal highlights the central role Taiwan plays in the global technology supply chain. The island nation is a leading manufacturer of advanced semiconductors, which are critical components powering AI applications, cloud computing, and next-generation electronics. With U.S. companies increasingly seeking reliable sources for these chips, the agreement aims to deepen the technological interdependence between the two countries while reducing reliance on other global suppliers.
U.S. officials have framed the agreement as a major step in strengthening domestic technology infrastructure. Commerce Secretary Lutnick stressed that the new Taiwanese investments will not only create jobs in the U.S. but also reinforce America’s position in semiconductor manufacturing—a sector the administration considers vital for economic and national security.
The initiative, however, is company-led rather than government-directed, Vice Premier Cheng clarified. Taiwanese firms will continue to maintain substantial operations at home, even as they expand their footprint in the United States. She noted that the investment strategy aligns with both countries’ long-term goals of fostering innovation, securing supply chains, and cultivating leadership in AI and other emerging technologies.
Analysts view the agreement as part of a broader geopolitical and economic strategy. Taiwan, while not a formal U.S. ally, relies heavily on American support, particularly in defense and high-tech sectors. The trade and investment deal underscores the growing U.S.-Taiwan alignment on technological and strategic fronts, including artificial intelligence, semiconductors, and energy infrastructure.
Beyond economics, the agreement carries strategic undertones. By incentivizing Taiwanese investment in U.S. AI and semiconductor production, Washington seeks to secure critical technology supply chains and reduce dependency on rival nations, while Taipei gains stronger economic and strategic ties with its most important international partner.
The deal represents a significant milestone in Taiwan–U.S. relations, reflecting both countries’ shared interest in high-tech collaboration and strategic partnership. As global competition in AI and semiconductors intensifies, the new agreement may serve as a model for fostering international technology alliances in an increasingly complex geopolitical landscape.
