U.S. President Donald Trump announced on Wednesday that the United States will impose a 100 per cent tariff on imported semiconductor chips. Focus Taiwan reported that the announcement, delivered from the Oval Office, came just hours before the country-specific tariffs were scheduled to take effect.
Trump’s 100% chip tariff sparks U.S.-Taiwan tensions
“We’ll be putting a tariff of approximately 100 per cent on chips and semiconductors,” Trump said. “But if you’re building in the United States of America, there’s no charge.”
A tariff of this magnitude could sharply raise costs for American companies reliant on Taiwanese chips and force difficult decisions for Taiwanese manufacturers trying to stay competitive in the U.S. market.
Taiwan, home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), plays a pivotal role in the global supply chain. Its advanced chip technologies are indispensable to everything from iPhones to fighter jets.
Earlier, a government-affiliated think tank, as per a separate report by Focus Taiwan, had said, “The United States should prioritise strengthening semiconductor cooperation with Taiwan instead of threatening tariffs on Taiwanese chips,”.
While the long-term fallout of 100 per cent tariff remains uncertain, Taiwan’s top chipmaker has already begun hedging its bets. In March, TSMC pledged an additional USD 100 billion to expand its manufacturing footprint in the United States.
TSMC accelerates U.S. expansion as chip tariff threatens Taiwanese firms
Last month, Focus Taiwan reported that the Taiwan Semiconductor Manufacturing Co. (TSMC) is fast-tracking the construction of its second and third semiconductor fabrication plants in Arizona, with plans to establish a large-scale “gigafab” cluster in the state. Speaking at an investor conference, TSMC Chairman CC Wei highlighted the strategic importance of Arizona in the company’s global footprint.
He said the state is poised to become a key centre for TSMC’s most advanced production technologies.
TSMC reported a second-quarter net profit of NT dollar 398.27 billion (USD 10.11 billion), marking a 60.7 per cent increase year-on-year and a 10.2 per cent rise from the previous quarter.
Even with such moves, the broader Taiwanese tech industry is bracing for impact. The new tariff raises urgent questions about how smaller firms in the semiconductor ecosystem, those without the scale or capital to set up shop in the U.S., will survive in a reshaped market. (Inputs from ANI)
