US tech companies are facing uncertainty after President Donald Trump’s tariff exemptions for semiconductors proved narrower than expected. Despite the carve-out, most of Taiwan’s exports to the US will still be subject to higher tariffs, hurting companies like TSMC, which produces a significant portion of the world’s advanced chips.
The Semiconductor Industry Association reported a 48.4% increase in chip sales in the Americas between February 2023 and 2024, but decades of offshoring have left the US with only 12% of global chipmaking capacity. The CHIPS Act aimed to reverse this trend by investing $52 billion in chip manufacturing, training, and research.
However, Trump’s tariff policy is threatening to undermine these efforts. The exemptions for lithography machines, essential equipment for chipmaking, were missing from the list, which could increase costs and discourage companies from bringing manufacturing back to the US.
US allies like Taiwan and South Korea will also feel the impact of the tariffs, as they rely heavily on exports to the US. Southeast Asian countries, particularly Vietnam and Thailand, are being hit with high tariff rates that could deter chipmaking companies from moving out of China.
The industry is bracing for a prolonged period of supply chain disorder and chaos, with potential long-term consequences for global trade and economic growth. As one former Taiwan legislator warned, “I see no soft landing to this. I see this as becoming an explosion of global supply chain disorder and chaos.”
Source: https://www.wired.com/story/trump-tariffs-impact-semiconductors-chips