In recent years, U.S. narratives about Taiwan’s dominant role in semiconductor manufacturing have taken a self-destructive turn. Efforts to shift more chip production to the United States are sensible and enjoy broad bipartisan support. However, some of the rhetoric used to justify these efforts — such as President Donald Trump’s claim that the island “stole” America’s semiconductor industry and administration officials’ demands to move 40% of chip manufacturing to the U.S. by 2028 — is counterproductive.

Policymakers are right to invest in domestic semiconductor manufacturing. Reliance on a single market for over 90% of such critical components is inherently risky, and tensions in the Taiwan Strait add to this risk. However, policymakers should avoid reinforcing narratives that portray the U.S.-Taiwan relationship in competitive terms or call for a broader disruption of Taiwan’s role in the chip industry. Such narratives are misguided for three reasons.

First, they’re inaccurate. When it comes to semiconductors, the U.S. and Taiwan aren’t competitors — they’re strategic partners, and this partnership has been instrumental in maintaining U.S. leadership in this vital sector. American companies dominate the global semiconductor industry and currently capture over 50% of global chip revenues. This success stems from a range of advantages, but collaboration with Taiwan has been particularly critical.

Taiwan didn’t steal America’s semiconductors; it makes them. The establishment of Taiwan Semiconductor Manufacturing Corporation (TSMC) in 1987 initiated a model of specialization and division of labor that quickly became the industry standard. By outsourcing manufacturing to third-party foundries, U.S. firms like NVIDIA and Qualcomm are able to save the tens of billions of dollars needed to build fabrication plants and instead pour this money into research and development, enabling them to design ever more advanced chips. As long as this model persists, it’s difficult to imagine companies from China or any other country caching up to, let alone surpassing, the U.S. industry leaders.

Second, the US-Taiwan semiconductor partnership offers the most practical path toward achieving America’s industrial goals, particularly its efforts to dominate emerging technologies and revitalize domestic manufacturing. Narratives that undermine Taiwan’s role don’t advance these objectives. If anything, they could hinder progress if translated into policy.

To win the race for critical technologies like artificial intelligence and quantum computing, the U.S. will require a reliable supply of increasingly sophisticated semiconductors at competitive costs. The same applies to efforts to reindustrialize the U.S. economy. Expanding domestic production of automobiles and electronics, for example, will demand vast quantities of chips, and that demand will only grow as manufacturing is scaled up.

While companies like TSMC have started producing some advanced chips in the United States, there are limits to how quickly and extensively this relocation can occur. As the U.S. pursues its industrial policy, it is unlikely that increased domestic chip production will keep pace with the rising demand. Semiconductor fabs in the U.S. will play an important role in building expertise, diversifying supply chains, and supplementing imports from Taiwan. However, they are unlikely to replace Taiwanese production in the foreseeable future. Policymakers and analysts should align expectations accordingly.

Finally, much of the rhetoric around Taiwan’s role in semiconductors risks straining US-Taiwan relations and undermining both the economic and physical security of an island that is America’s fourth largest trading partner and is critical to U.S. strategic interests.

The semiconductor industry accounts for roughly 20% of Taiwan’s GDP. It is also one of the island’s greatest strategic assets. While the “silicon shield” doesn’t make Taiwan invincible, it does serve as an asymmetric advantage that substantially raises the risks of military action against the island by Beijing or any other potential adversary.

Some prominent voices in the U.S. openly opine that Washington’s interest in Taiwan is driven solely by its role in semiconductor manufacturing and that, once sufficient production shifts to the United States, the island’s fate will be unimportant.

This kind of rhetoric, by itself, doesn’t directly harm Taiwan, but it deeply unsettles its citizens. When political leaders in Taiwan’s primary security partner threaten to seize its most valuable industry and then abandon it, the perceived threat is hard to ignore. Such discourse undermines pro-US figures across Taiwan’s political parties, while lending credibility to US-skeptic and pro-Beijing narratives.

None of this is to suggest that U.S. efforts to onshore some of its semiconductor manufacturing are misguided. Current initiatives don’t undermine the fabless model that has benefited both American and Taiwanese firms. In fact, TSMC is leading the onshoring effort through its $165 billion investment in Arizona, where it will continue to serve fabless chip designers. And with global demand for semiconductors expected to continue rising, these developments are unlikely to significantly diminish Taiwan’s strategic advantages or its share of the economic benefits.

Nevertheless, U.S. policymakers must recognize that most advanced chips will continue to be manufactured in Taiwan for the foreseeable future. This is due to Taiwan’s world-leading industry cluster and its deep pool of highly skilled, cost-effective labor. The U.S. could, over time, develop similar advantages, and given the right policy, incentives, and market conditions, Taiwanese companies can be key partners in this endeavor. But doing so will likely take decades. In the meantime, American chip designers will remain reliant on foundries in Taiwan to produce the majority of their high-end offerings.