Investments would also cover AI servers and energy, Taiwan Economy Minister Kung Ming-hsin told reporters in Taipei, adding that it was ⁠up to companies to reveal the chip-related amounts.

Taiwan's benchmark stock (.TWII), opens new tab closed at a record high on Friday, boosted by strong TSMC fourth-quarter earnings and a favourable investor reaction to the tariff ‍deal.

"Taiwan is the first country the U.S. has publicly announced as receiving the most preferential treatment for chips and related products, highlighting that Washington views Taiwan as a key strategic partner in semiconductors," Taiwan Institute ‌of Economic ‌Research President Chang Chien-yi told Reuters.

TSMC ROLE

In a statement, TSMC, the world's main producer of advanced AI chips welcomed the prospect of "robust" trade pacts between the United States and Taiwan, adding that all its investment decisions were based on market conditions and customer demand.

"The market demand for our advanced technology is very strong," it said. "We continue to invest in Taiwan and expand overseas."

Once signed, the deal will need to be ratified by Taiwan's parliament, where the opposition has the most seats and which has expressed concern about the "hollowing out" of the crucial chip industry under a ⁠U.S. trade deal.

The objective was to bring 40% ⁠of Taiwan's entire chip supply chain ​and production to the United States, Lutnick told CNBC in an interview on Thursday. If they were not built in the United States, the tariff was likely to be 100%.

Kung said he did not know how the figure of 40% had been calculated but Taiwan estimated that by 2036, the production split between Taiwan and the United States would be 80/20 for the advanced chips, those of five nanometres and ‍below.

"This round of deployment will strengthen the resilience of Taiwan–U.S. and global semiconductor supply," he said.

"A moderate level of global diversification is also necessary. Going forward, the biggest AI orders will come from the U.S. market."

The semiconductor investment was the largest in U.S. history, Lutnick said in a post on X, alongside a picture of himself with Cheng, Taiwan's top trade representative Yang Jen-ni and U.S. Trade Representative Jamieson Greer.

Sharing a similar picture on ​her Facebook page of the officials all together, Taiwan Vice President Hsiao Bi-khim said the island had shown ‍its strength on the stage of global trade.

"Taiwan may not be large in area, but we are agile and innovative - and we are an indispensable force for good within the global supply chain," she added.