Increased tariffs poised to drive more Taiwanese semiconductor production to America, predicts analyst
In a move that could significantly disrupt the global semiconductor industry, US President Donald Trump has announced a proposed 100 percent tariff on chip imports. This decision, aimed at "restoring the glory of the US semiconductor industry," could potentially have far-reaching consequences, particularly for Taiwan's semiconductor industry.
Taiwan, a major global supplier of semiconductors, stands to lose significantly from this tariff. Companies like TSMC, which dominate advanced chip manufacturing, could see their costs for exporting to the US substantially increase, potentially reducing demand from American companies and hurting their revenue and market share. This could lead to a reconfiguration of supply chains, increasing the risk of shortages or delays in chip availability globally.
The global semiconductor market could also be affected, with existing supply chain tensions potentially being exacerbated and prices rising, slowing innovation and the production of electronics dependent on these chips. The tariff could also trigger retaliatory trade measures, further straining international trade relations and efficiency in semiconductor production.
Arisa Liu, a researcher at the Taiwan Institute of Economic Research, predicts that the global semiconductor industry is likely to accelerate towards establishing roots in the US due to this tariff. The tariff could lead to a shift in Taiwan's semiconductor production overseas, potentially affecting employment, wages, and local investment in Taiwan.
Moreover, the tariff policy could prompt more TSMC suppliers and related firms to set up operations in the US, potentially leading to a decline in Taiwan-based semiconductor production and affecting employment, wages, and local investment in Taiwan. The cost of building semiconductor facilities in the US could also increase due to an incomplete US supply chain, especially in terms of imported semiconductor equipment and materials.
This could result in higher prices for end-user electronics, as costs across the semiconductor supply chain rise. The policy creates uncertainty for future market demand, according to Arisa Liu.
Trump's approach, imposing punitive tariffs unless companies invest in the US, could pressure global chipmakers to accelerate their US investments, driving up prices of end-user electronics. However, it remains to be seen how this policy will impact the competitive landscape in the foundry industry, with major companies like TSMC, Intel Corp, and Samsung Electronics Co investing in US facilities and expected to be exempt from the tariff.
[1] The proposed 100% tariff on chip imports by US President Donald Trump. [2] Arisa Liu, a researcher at the Taiwan Institute of Economic Research, made this prediction. The statement was made by Arisa Liu in a telephone interview with CNA.
- The proposed 100% tariff on chip imports by US President Donald Trump could potentially lead to a shift in Taiwan's semiconductor production overseas, as predicted by Arisa Liu, a researcher at the Taiwan Institute of Economic Research.
- Arisa Liu, a researcher at the Taiwan Institute of Economic Research, predicts that the global semiconductor industry could accelerate towards establishing roots in the US due to the proposed 100% tariff on chip imports by US President Donald Trump.
