'Only 80 miles from China': Top US official says 99% chip dependence on Taiwan a security risk

The U.S. cannot afford to rely on Taiwan for its chip supply, says Secretary Howard Lutnick, who warned in a CNBC interview that 99% of leading-edge semiconductors being made just “80 miles from China” poses a direct threat to national security. Instead, the U.S. is now moving aggressively to re-shore chip manufacturing through deals with South Korea, Japan — and major equity moves under the CHIPS Act.

“Taiwan is 9,500 miles from the U.S. and only 80 miles from China,” Lutnick emphasized. “That’s not where 99% of our leading-edge chips should be made.”

The Trump administration has made semiconductor sovereignty a core priority, amid deepening U.S.–China tensions and fears of a Taiwan Strait crisis disrupting global tech supply chains. Lutnick confirmed ongoing negotiations with Intel and other chipmakers to establish and expand domestic production capacity.

To back this strategy, the U.S. has signed agreements with key allies. South Korea and Japan are partnering with the U.S. to develop critical semiconductor infrastructure, jointly investing in cutting-edge fabs and tech ecosystems to diversify production and de-risk geopolitical exposure.

Washington is also contemplating taking equity stakes in chip companies like Intel, Micron, TSMC, and Samsung — particularly those receiving billions under the CHIPS and Science Act. The goal: ensure long-term oversight, domestic production guarantees, and reduce dependency on foreign supply chains.

This aligns with broader regional trends. Japan is rolling out heavy subsidies to attract chipmakers and build advanced fabrication facilities, while South Korea is anchoring a national push to consolidate its own semiconductor dominance — all while aligning with U.S. strategic goals.

The stakes are massive: semiconductors power everything from smartphones and vehicles to defense systems and AI infrastructure. A disruption — especially in Taiwan — would be catastrophic for national economies and security.

“We must manufacture our own chips,” Lutnick said plainly. “It’s not just about economics anymore. It’s national security.”