U.S. and Taiwan Sign Historic $500 Billion Semiconductor Reshoring Agreement

The American Institute in Taiwan and the Taipei Economic and Cultural Representative Office signed a landmark trade agreement on January 15, 2026. This historic pact triggers a massive reshoring of the semiconductor industry to the United States. It forms a central part of the Freedom 250 initiative to restore American technological independence and industrial strength.

Taiwan has committed to at least $250 billion in direct investments to build advanced semiconductor and artificial intelligence production facilities on American soil. The Taiwanese government will also provide $250 billion in credit guarantees to support the movement of the entire supply chain ecosystem. World-class industrial parks will be established to foster innovation and next-generation manufacturing clusters across the country.

The agreement establishes a predictable tariff framework where reciprocal rates are capped at 15 percent for general goods. A unique investment reward system allows Taiwanese firms to import chips duty-free at 2.5 times their planned U.S. capacity during factory construction. This mechanism ensures supply stability while domestic manufacturing capacity is actively being built, as detailed in the official fact sheet.

Beyond economic incentives, Taiwan secures expanded access to critical American markets including defense technology, biotechnology, and telecommunications. This partnership creates a trusted loop of technological collaboration and deepens U.S. investment in Taiwan’s emerging sectors. Both nations aim to strengthen leadership in high-stakes fields like artificial intelligence and secure communications through these shared resources.

This whole-of-government effort addresses the long-term decline of U.S. wafer fabrication, which dropped from 37 percent in 1990 to under 10 percent recently. By anchoring production within the United States, the administration aims to end reliance on brittle global supply chains and foreign industrial policies. The deal positions the U.S. as a potential net exporter of advanced logic chips by the next decade.