US President Donald Trump has threatened to impose tariffs of up to 100% on chips made in Taiwan, which could deal a fresh blow to Nvidia and other tech firms reliant on the island nation’s TSMC for chip production.
Nvidia shares plummeted by 17% on Monday after China’s DeepSeek released an AI model that rivals OpenAI’s performance, sparking fears of declining demand. The US has long relied on Taiwan’s semiconductors for its specialist AI chips, but Trump’s proposed tariffs could increase costs and disrupt the supply chain.
TSMC is already investing in US chip manufacturing, with a $65 billion initiative to build plants in Arizona. However, experts warn that US production capacity is not yet developed enough to meet demand, potentially leading to higher prices for hardware reliant on Taiwanese chips.
Taiwan’s economy ministry has responded by highlighting the complementary relationship between its and US economies, saying that tariffs could complicate efforts to boost US chip production rather than hasten them. The issue highlights the ongoing battle for global technological dominance between the US and China, with AI being a key sector of focus.
Source: https://www.businessinsider.com/trump-taiwan-chip-tariffs-nvidia-stock-tsmc-deepseek-2025-1