Trump unveils 100% tariffs on semiconductors - US-made chips incur no cost
In a significant move towards bolstering the American semiconductor industry, Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung have both initiated the production of chips in the United States.
TSMC, the world's largest semiconductor manufacturer, has started production at its Arizona fab, with Apple as one of its first customers. The company expects to source over 19 billion chips from local chip manufacturing, reflecting the high demand for its services. Remarkably, TSMC's capacity demand is so high that it's already sold out through 2027.
Meanwhile, Samsung's new Texas fab is nearing completion, but the company has reportedly delayed its completion due to a lack of customers. This delay underscores the challenges faced by the industry in meeting the significant demand for semiconductors.
The surge in demand for semiconductors can be attributed to the seismic AI infrastructure buildout by tech giants and the use of chips in various everyday items. The Biden administration's CHIPS and Science Act, which jumpstarted the production of advanced semiconductors in the U.S., is a testament to the government's commitment to addressing this demand.
However, the tariff landscape presents a complex challenge. President Donald Trump announced a 100% tariff on foreign-made semiconductors, which applies to semiconductors not built within the United States or ordered from local fabs. The tariff threat has forced companies to expand their investments, securing about $1.5 trillion in commitments for building and expanding the chip making supply chain within America's borders.
Tim Cook, CEO of Apple, promised an additional $100 billion in investments to avoid chip tariffs for iPhones. Yet, the tariff exemptions for locally-made semiconductors are not yet clear. The president has stated that there will be no tariff charge for companies buying or building locally-made semiconductors and importing them. However, the specifics of these exemptions remain uncertain, with no publicly available details or documentation in the provided search results.
This uncertainty surrounding tariff exemptions could have implications for American consumers. If companies are forced to import chips at elevated rates due to tariffs, American consumers may face increased costs, leading to inflation and reduced demand.
In conclusion, the expansion of TSMC and Samsung's US operations is a significant step towards meeting the demand for semiconductors. However, the tariff landscape presents challenges that need to be addressed for the industry to thrive and for consumers to benefit from affordable, locally-made semiconductors.
[1] Sources: Tom's Hardware Newsletter, Federal Register notices, official U.S. government trade agency announcements.
Technology plays a crucial role in the expansion of TSMC and Samsung's US operations, as the surge in demand is driven by the seismic AI infrastructure buildout by tech giants and the use of chips in various everyday items.
The tariff landscape, however, presents complex challenges for the semiconductor industry, with uncertainties surrounding tariff exemptions potentially affecting American consumers and the affordability of locally-made semiconductors.
