Taiwan plans to boost the United States’ semiconductor operations with a $500 billion commitment, per a Thursday White House announcement. In return, the US and Taiwan agreed to a long-sought trade agreement that would lower tariffs on goods from the self-governed island to 15%.
Under the deal, the $500B commitment to the US would come for two split purposes. Taiwan’s technology industry would commit to making at least $250 billion in direct investments to expand advanced semiconductor, energy, and artificial intelligence operations in the US. In addition, Taiwan agreed to provide an additional $250 billion in credit guarantees for further investment in the American semiconductor supply chain.
“Partnering with a leader like Ripple is a milestone for LMAX, reflecting confidence and momentum in our cross-asset growth strategy. With the benefit of greater US and global regulatory clarity, fiat-backed stablecoins will be a key catalyst in driving the convergence of TradFi and digital assets, and we firmly believe that RLUSD is positioned at the forefront,” said David Mercer, Chief Executive Officer of LMAX Group. “We are thrilled to partner with the forward-looking leadership team at Ripple as together we develop a modern financial ecosystem and the complete cross-asset marketplace for institutions globally.”
“Institutions are increasingly recognising the transformative potential of blockchain technology to modernise global financial market structure,” said Jack McDonald, SVP of Stablecoins at Ripple. “LMAX has long been a leader in providing the transparent, regulated infrastructure that institutional players require. This partnership will accelerate the utilisation of RLUSD—already a top 5 USD-backed stablecoin—within one of the largest and most sophisticated trading environments.”
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Details of the Taiwan-US Semiconductor Deal
Per an LMAX press release on Thursday, key benefits of the integration for LMAX Group clients include the following:
- 24/7 cross-asset market access: fungibility via RLUSD, not available with fiat today.
- Enhanced liquidity: RLUSD will serve as collateral and as a settlement currency for spot crypto trading, and fiat crosses.
- Margin efficiency: Clients can utilise RLUSD as margin funding for perpetual futures and CFD trading.
- Secure custody: RLUSD holdings will be accessible via LMAX Custody, utilising segregated wallets to ensure fungibility and transferability across TradFi and digital assets.
- Institutional on-ramps: LMAX Kiosk will enable institutional on-ramps, allowing clients to trade multiple FX and digital products using RLUSD collateral.
In addition, the US also agreed that duties on Taiwanese shipments would fall from the previous 20% rate, putting them on par with Japan and South Korea, which reached their own agreements last year.
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Furthermore, the announced deal between the US and Taiwan gave a huge boost to Taiwan Semiconductor Manufacturing (TSM). While a White House statement outlining the deal did not specifically mention TSMC, the deal has clear benefits for the company. The semiconductor manufacturer has plans for more manufacturing in the US. Additionally, TSMC and other companies will take the lead on the $250 billion in planned investment, US Commerce Department officials familiar with the details say. TSMC stock is up over 5% at press time, and will likely continue its ATH rally to end the week.