U.S. President Donald Trump speaks throughout an occasion with Apple CEO Tim Cook dinner within the Oval Workplace of the White Home on August 6, 2025 in Washington, DC.
Win Mcnamee | Getty Photographs
After months of hypothesis, U.S. President Donald Trump has divulged extra of his semiconductor tariff plans, however his newest threats would possibly elevate extra questions than solutions.
On Wednesday, Trump stated he’ll impose a 100% tariff on imports of semiconductors and chips, however not for firms which might be “constructing in the US.”
As semiconductors symbolize an over $600 billion business on the coronary heart of the trendy digital economic system, any potential tariffs maintain large weight.
Nonetheless, consultants say the President has but to offer key particulars on the coverage, which is able to in the end decide their full influence and targets.
“It is nonetheless too early to pin down the influence of the tariffs on the semiconductor sector,” Ray Wang, analysis director of semiconductors, provide chain and rising know-how at The Futurum Group, informed CNBC.
“The ultimate rule is probably going nonetheless being drafted and the technical particulars are removed from clear at this level.”
Large gamers good, small gamers cooked?
One of many greatest questions for chip gamers and buyers will likely be how a lot manufacturing an organization must decide to the U.S. to qualify for the tariff exemption.
The U.S. has been working to onshore its semiconductor provide chain for a few years now. Since 2020, the world’s largest semiconductor firms equivalent to TSMC and Samsung have dedicated a whole lot of billions of {dollars} to constructing crops within the U.S.
Chatting with CNBC’s “Squawk Field Asia” on Thursday, James Sullivan, Managing Director and Head of Asia Pacific Fairness Analysis at J.P. Morgan, stated this might imply most main chip producers receiving exemptions.
If so, the coverage may have the impact of “persevering with to consolidate market share amongst the biggest cap gamers within the area,” Sullivan stated.
Certainly, shares of Asian chip majors TSMC and Samsung, which have vital investments within the U.S., rose in Thursday morning buying and selling following Trump’s announcement. Early this yr, TSMC introduced it might increase its investments within the U.S. to $165 billion.
Shares South Korea’s Samsung and SK Hynix — which have additionally invested within the U.S. — had been additionally buying and selling up after a Korean commerce envoy reportedly stated on radio that the duo could be exempt from the 100% tariffs.
An exemption on what?
Past the query of exemptions, many different features of the potential tariffs stay unclear.
Talking on CNBC’s “Squawk Field Asia,” on Thursday, Stacy Rasgon, senior U.S. semiconductor analyst at Bernstein, famous that a lot of the semiconductors that enter the U.S. come inside shopper items equivalent to smartphones, PCs and vehicles.
For instance, in 2024, the U.S. imported $46.3 billion of semiconductors — solely about 1% of all U.S. imports, in keeping with the Info Expertise and Innovation Basis.
Whereas Rasgon stated tariffs on these imports could also be manageable, broader tariffs could be more durable to take care of.
“What we do not know with [Trump’s] feedback on tariffs, is it simply uncooked semiconductors? Are there going to be tariffs on finish gadgets? Are you going to be tariffs on elements inside finish gadgets?,” Rasgon requested.
The confusion and questions round semiconductor tariffs had been dropped at the forefront after the U.S. Division of Commerce began a nationwide safety investigation of semiconductor imports in April, simply because the sector was exempted from Trump’s “reciprocal” tariffs.
The imprecise language from the Trump administration — although not invoked within the president’s newest proclamations — may theoretically be used to use broad tariffs to an unlimited phase of the electronics provide chain. It is also unclear on the extent that semiconductor supplies and manufacturing tools used to fabricate chips would fall underneath the tariffs.
Advanced provide chains
Potential tariff methods is also sophisticated by the intricate and interdependent nature of the semiconductor provide chain.
Rasgon gave the instance of American chip designer Qualcomm, which sends their designs to TSMC to be manufactured in Taiwan after which imported to the U.S.
“Does that imply these [chip imports] wouldn’t be tariffed, as a result of they’re made at TSMC, and TSMC is constructing within the U.S.?… I do not know. Hopefully that is how it might be,” he stated.
One other massive purchaser of semiconductors within the U.S. are cloud service suppliers like Amazon Internet Companies and Google, that are important to energy Washington’s AI plans.
In line with a latest report from ITIF, semiconductors contribute $7 trillion in world financial exercise yearly by underpinning a spread of downstream purposes together with AI and “massive information.”
In a possible signal of American firms in search of to maneuver their chip provide chains into the U.S., Apple CEO Tim Cook dinner, alongside Trump on the White home Wednesday, introduced that will probably be provided chips from Samsung’s manufacturing plant in Texas.
The corporate additionally introduced a further $100 billion in U.S. investments, elevating its whole funding commitments within the nation to $600 billion over the following 4 years.
