Trump Tariffs Impact Taiwan, Leading TSMC to Significantly Increase Chip Prices

In the coming weeks, Taiwan’s semiconductor industry is bracing for potential tariffs from the Trump administration, which could lead to an increase in chip prices by as much as 15%.This looming decision threatens to disrupt the manufacturing of consumer technology significantly.

Trump’s Resolve for “Made in USA”Chips: Catalyst for Domestic Semiconductor Development

Recent reports from Ctee suggest that Taiwan may soon face tariffs, further driven by Trump’s priority on sourcing semiconductor chips domestically. Following the introduction of tariffs on Mexico, Canada, and China, many observers are concerned about similar measures extending to Taiwan, as the U. S.seeks to reshape its tech supply chain.

Industry experts predict that these tariffs could result in skyrocketing semiconductor prices, prompting major technology companies to reassess their existing contracts. Consequently, the Bill of Materials (BoM) for numerous products might see substantial increases. The U. S.government’s focus appears to be directed at bolstering domestic chip production, with tariffs intended to incentivize firms like Taiwan Semiconductor Manufacturing Company (TSMC) to accelerate the establishment of operational facilities within U. S.borders, thereby circumventing additional taxation.

Trump has previously accused Taiwan of “stealing U. S.technology, ”alleging that they owe compensation for such actions. This punitive economic strategy significantly burdens TSMC, compelling the company to pivot toward domestic manufacturing—a shift already initiated under the Biden administration’s CHIPS Act.

TSMC getting N3E orders from various clients

Currently, TSMC’s principal project in the United States is its facility in Arizona, where they have kicked off production of 4nm chips, with ambitions to scale down to 2nm technology. However, profit margins in U. S.operations are reportedly lower relative to those in Taiwan, raising concerns about the long-term viability of production stateside unless adequate subsidies are implemented. Consequently, the semiconductor giant may be forced to increase prices for its more mature nodes, such as those at the 7nm level and beyond, should tariffs be enforced, creating a perfect storm for the company.

While Trump’s tariff approach is presently viewed as a negotiating strategy, its impending impact on the consumer tech industry is troubling, as any escalated trade barriers would adversely affect the already fragile supply chain.

Source & Images