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 inundation threats would possibly create extra questions than solutions.
On Wednesday, Trump mentioned he’ll impose a 100% tariff on imports of semiconductors and chips, however not for companies which are “constructing in america.”
As semiconductors signify an over $600 billion industry on the coronary heart of the trendy digital financial system, any potential tariffs maintain huge weight.
Nevertheless, specialists say the President has but to offer key particulars on the coverage, which is able to finally decide their full impression and targets.
“It is nonetheless too early to pin down the impression of the tariffs on the semiconductor sector,” Ray Wang, analysis director of semiconductors, provide chain and rising know-how at The Futurum Group, advised CNBC.
“The ultimate rule is probably going nonetheless being drafted and the technical particulars are removed from clear at this level.”
Massive gamers good, small gamers cooked?
One of many largest questions for chip gamers and traders might 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 corporations corresponding to TSMC and Samsung have dedicated lots of 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, mentioned this might imply most main chip producers receiving exemptions.
If so, the coverage might have the impact of “persevering with to consolidate market share amongst the most important cap gamers within the area,” Sullivan mentioned.
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 announced it will broaden 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. — have been additionally buying and selling up after a Korean commerce envoy reportedly mentioned on radio that the duo can be exempt from the 100% tariffs.
An exemption on what?
Past the query of exemptions, many different facets 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 many of the semiconductors that enter the U.S. come inside shopper items corresponding to smartphones, PCs and automobiles.
For instance, in 2024, the U.S. imported $46.3 billion of semiconductors — solely about 1% of all U.S. imports, based on the Information Technology and Innovation Foundation.
Whereas Rasgon mentioned tariffs on these imports could also be manageable, broader tariffs can be tougher to cope with.
“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 taking a look at tariffs on elements inside finish gadgets?,” Rasgon requested.
On April 1, the U.S. Division of Commerce launched a national security investigation into semiconductor imports. A day later, the sector was exempted from Trump’s “reciprocal” tariffs.
The imprecise language from the Trump administration — although not invoked within the president’s inundation proclamations — might theoretically be used to use broad tariffs to an infinite section of the electronics provide chain. It is also unclear on the extent that semiconductor supplies and manufacturing gear used to fabricate chips would fall beneath the tariffs.
Advanced provide chains
Potential tariff methods may be 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 will be,” he mentioned.
One other giant 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 keeping with a latest report from ITIF, semiconductors contribute $7 trillion in world financial exercise yearly by underpinning a variety of downstream purposes together with AI and “massive knowledge.”
In a possible signal of American corporations 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 it will likely be provided chips from Samsung’s manufacturing plant in Texas.
The corporate additionally introduced an extra $100 billion in U.S. investments, elevating its complete funding commitments within the nation to $600 billion over the following 4 years.