A proposed 100 percent tariff on chip imports announced by US President Donald Trump could shift more of Taiwan’s semiconductor production overseas, a Taiwan Institute of Economic Research (TIER) researcher said yesterday.
Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the US, leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand, Arisa Liu (劉佩真) at the institute’s Taiwan Industry Economics Database said in a telephone interview.
Trump’s move signals his intention to "restore the glory of the US semiconductor industry," Liu noted, saying that Trump previously used a "carrot" strategy with incentives such as raising investment tax credits for chipmakers to 35 percent to encourage semiconductor manufacturing investments.
Photo courtesy of the Taiwan Institute of Economic Research
Now he is deploying the "stick" — imposing punitive tariffs unless companies invest in the US, she added.
This dual approach could pressure global chipmakers to accelerate their US investments. As a result, this will inevitably raise costs across the semiconductor supply chain and drive up prices of end-user electronics and introduce further uncertainty to the semiconductor market, she said.
Noting that the US is the largest global market for artificial intelligence and high-performance computing applications, Liu said that imposing such broad tariffs could influence where semiconductor companies choose to deploy advanced process facilities to avoid high US tariffs.
As the US supply chain remains incomplete — especially in terms of imported semiconductor equipment and materials — the cost of building fabs in the country could be potentially pushed up, Liu said.
She added that the current competitive landscape in the foundry industry remains intact because major companies like Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Intel Corp and Samsung Electronics Co — all of which are investing in US facilities — would be exempt from the tariff, meaning the competitive playing field has remained unchanged.
However, Liu noted that the tariff policy could prompt more TSMC suppliers and related firms to set up operations in the US in response. This could lead to a decline in Taiwan-based semiconductor production and potentially affect employment, wages and local investment in Taiwan — a trend worth monitoring.
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