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Trump To Tariff Chips Made In Taiwan, Targeting TSMC

Daniel Nenni

Admin
Staff member
President Trump is preparing to place tariffs beyond Chinese assembled electronics to computer chips made in Taiwan, warning the tariffs could reach as high as 100%.

“In particular, in the very near future, we’re going to be placing tariffs on foreign production of computer chips, semiconductors and pharmaceuticals to return production of these essential goods to the United States,” Trump said in a speech to Republicans on Monday.


“They left us and went to Taiwan,” he then said in an apparent reference to how many of the leading US tech companies have been sourcing their processors from Taiwan’s TSMC, a top semiconductor manufacturer. TSMC has established a factory in Arizona, but much of its chip production remains in Taiwan, where it’s been serving clients including Apple, Nvidia, Qualcomm and AMD, among others.

“We want them to come back,” Trump said before slamming the US’s CHIPS and Science Act, which his predecessor President Biden signed to invest over $52 billion in domestic chip manufacturing.

“And we don’t want to give them billions of dollars like this ridiculous program that Biden has given everybody billions of dollars. They already have billions of dollars,” Trump said. “They’ve got nothing but money Joe. They didn’t need money. They needed an incentive. And the incentive is gonna be they’re not gonna wanna pay a 25, 50 or even a 100 % tax.”

“They’re gonna build their factory with their own money. We don’t have to give them money,” Trump added, later claiming: “They’re giving the money, they don’t even know what they’re going to do with it.”

The recipients of the funding, such as Intel, might disagree. Last year, Intel received $7.9 billion from the CHIPS Act, which will go toward expanding its factories in Arizona, New Mexico, Oregon and Ohio, where the company is building a new chip manufacturing hub. Even so, Trump is betting his tariff threat will push more US tech companies into migrating their chip manufacturing to the US over Taiwan.

“The only way you’ll get out of this is to build your plant —if you want to stop paying the taxes or the tariffs— you’ll have to build your plant right here in America,” Trump added. “That’s what’s going to happen at record levels.”

Still, it takes years to build a chip factory, meaning any tariffs on Taiwanese-manufactured chips risk causing price hikes for numerous computer products, such as Nvidia graphics cards, Apple iPhones and AMD processors, which all come from TSMC factories. That said, a lot will depend on how US trade officials implement such a tariff policy. TSMC-made chips usually aren’t exported directly to the US, but sent to China and other Asian countries, where they’re then assembled into consumer electronics bound for the US.

 
President Trump is preparing to place tariffs beyond Chinese assembled electronics to computer chips made in Taiwan, warning the tariffs could reach as high as 100%.

“In particular, in the very near future, we’re going to be placing tariffs on foreign production of computer chips, semiconductors and pharmaceuticals to return production of these essential goods to the United States,” Trump said in a speech to Republicans on Monday.


“They left us and went to Taiwan,” he then said in an apparent reference to how many of the leading US tech companies have been sourcing their processors from Taiwan’s TSMC, a top semiconductor manufacturer. TSMC has established a factory in Arizona, but much of its chip production remains in Taiwan, where it’s been serving clients including Apple, Nvidia, Qualcomm and AMD, among others.

“We want them to come back,” Trump said before slamming the US’s CHIPS and Science Act, which his predecessor President Biden signed to invest over $52 billion in domestic chip manufacturing.

“And we don’t want to give them billions of dollars like this ridiculous program that Biden has given everybody billions of dollars. They already have billions of dollars,” Trump said. “They’ve got nothing but money Joe. They didn’t need money. They needed an incentive. And the incentive is gonna be they’re not gonna wanna pay a 25, 50 or even a 100 % tax.”

“They’re gonna build their factory with their own money. We don’t have to give them money,” Trump added, later claiming: “They’re giving the money, they don’t even know what they’re going to do with it.”

The recipients of the funding, such as Intel, might disagree. Last year, Intel received $7.9 billion from the CHIPS Act, which will go toward expanding its factories in Arizona, New Mexico, Oregon and Ohio, where the company is building a new chip manufacturing hub. Even so, Trump is betting his tariff threat will push more US tech companies into migrating their chip manufacturing to the US over Taiwan.

“The only way you’ll get out of this is to build your plant —if you want to stop paying the taxes or the tariffs— you’ll have to build your plant right here in America,” Trump added. “That’s what’s going to happen at record levels.”

Still, it takes years to build a chip factory, meaning any tariffs on Taiwanese-manufactured chips risk causing price hikes for numerous computer products, such as Nvidia graphics cards, Apple iPhones and AMD processors, which all come from TSMC factories. That said, a lot will depend on how US trade officials implement such a tariff policy. TSMC-made chips usually aren’t exported directly to the US, but sent to China and other Asian countries, where they’re then assembled into consumer electronics bound for the US.


Not to worry the tariffs will be paid by those who can afford it!!
 
So dumb. Sales restrictions haven't had a positive outcome for the US, so now it looks like we might be choosing an even dumber path.

I believe this is what the US electorate voted for!

Vivek already got kicked out of the club , didnt make day one , for saying US folk are stupid.

If this thread get discovered you could be in line for a.visit for suggesting this is a stupid move by someone who doesnt know what they are talking about.
 
With the new diffusion rules, the US would become a major consumer of AI chips. I wonder if companies will start placing orders for Intel 18A chips, given the mentioned tax on imports from Taiwan.
 
AMD & Nvidia use N4 process mostly now. Since TSM has N4 process in Arizona fab and iirc, with 25000 Wafers per month capacity there, would they be able to service these customers avoiding the tariffs?

Ironically, Intel and Apple use N3 mostly, so they will be hit hard if the tariffs are announced now. Intel cannot get a break on anything!!!
 
No definitely not they can still bypass some of it by packing it in new mexico and shipping more from Ireland(Xeon mainly ) and Arizona they have options but not everyone have them 100% tariffs are dumb 10-20% is still okayish
 
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No definitely not they can still bypass some of it by packing it in new mexico and shipping more from Ireland and Arizona they have options but not everyone have them 100% tariffs are dumb 10-20% is still okayish
Nice, I didn't think of it that way. May be AMD and NVDA can package at Intel Foundry and bypass tariff too:sneaky:.
 
This is only the final.product?

What about everything else in the production process?

A cheeky little Tariff on the Litho Tool from ASML would be quite the kick in the nuts for manufacturers.

Any Inspection and Repair tools from.outside US .....

Come on Donny ....

Get disrupting!!!
 
This is only the final.product?

What about everything else in the production process?

A cheeky little Tariff on the Litho Tool from ASML would be quite the kick in the nuts for manufacturers.

Any Inspection and Repair tools from.outside US .....

Come on Donny ....

Get disrupting!!!
That would require Tariffs on Japan and Netherlands
 
Just tariffs on imported finished goods.

No need for sanctions.

That's the point, or the lack of it. Chips will be shipped to China for OSAT from USA, likely enjoying bonded zone privileges (zero customs duty on re-exported product,) and then hit with a duty on way back, then shipped to a 3rd country, then to China again to a PCBA factory, from which it will go to a final product, which will be hit with a duty.

And if you try to do OSAT in USA, you have to find millions of girls with very dexterous fingers who will work for a dollar per hour in USA, or you will still not be competitive with Asian OSAT...

A bit ridiculous nature of US customs duty calculation on intermediary product is why no one ever processes anything in USA. Want to do chip packaging? You will have to pay a duty on close to full value of the final chip, sans the value you added with your service, AND you will not qualify for US certificate of origin (but you will qualify for a WTO country certificate of origin if you do the same abroad...)

There is an exemption for cars, but none for electronics as I far as I know (otherwise, Americans will have to pay customs duty on the value of cars assembled in USA, as most of their components cost come from abroad).
 
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The only remedy is that Intel makes chips in America for Intel itself, Apple, Nvidia, Qualcomm, Broadcom, Google, Amazon, Microsoft, Facebook and AMD, among others. When would that be, before or after Trump's term ends? Until then, why would TSMC care about the tariff, even 1000%?
 
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The tariff is just passed on to the customer; TSMC might think about adjusting the wafer price. The loss of CHIPS funding will be disincentivizing for building fabs in the US.
 
That's the point, or the lack of it. Chips will be shipped to China for OSAT from USA, likely enjoying bonded zone privileges (zero customs duty on re-exported product,) and then hit with a duty on way back, then shipped to a 3rd country, then to China again to a PCBA factory, from which it will go to a final product, which will be hit with a duty.

And if you try to do OSAT in USA, you have to find millions of girls with very dexterous fingers who will work for a dollar per hour in USA, or you will still not be competitive with Asian OSAT...

A bit ridiculous nature of US customs duty calculation on intermediary product is why no one ever processes anything in USA. Want to do chip packaging? You will have to pay a duty on close to full value of the final chip, sans the value you added with your service, AND you will not qualify for US certificate of origin (but you will qualify for a WTO country certificate of origin if you do the same abroad...)

There is an exemption for cars, but none for electronics as I far as I know (otherwise, Americans will have to pay customs duty on the value of cars assembled in USA, as most of their components cost come from abroad).
This reminds me of the early days of environmental regulation. Initially regulations were based on the concentration of emissions. The result? Any good Chem E could tell you the solution to pollution is dilution. Eventually the legislators wised up and started basing regulations on mass, a fundamental property.

It is looking like these tariffs are going to have as many holes as those early environmental organizations.

I'm still trying to figure out why we can't just look at what the countries that "took our jobs" are doing and do the same since it clearly works. That would go a long way towards leveling the playing field.
 
The lack of logic in this is mind numbing.
Lets think this through using an example: Lets say an AMD CPU where 90% of the price of that CPU is markup that AMD adds because they designed the chip. 10% is manufacturing costs from TSMC. Trump puts 25% tariffs on the entire price of the chip, so he is taxing Americans 25% on a chip that is 90% American?
 
So dumb. Sales restrictions haven't had a positive outcome for the US, so now it looks like we might be choosing an even dumber path.

"So dumb"

You are so polite...

The first victim, if this policy implemented along with stopping Chips Act grants and loans, will be Intel.
 
I've been thinking about this some more. Lets say Trump goes ahead with these tariffs. Now, the only way they can have the effect intended, is when there are two competitors making chips to sell in the US. Company X manufactures in US, company Y at TSMC.
Company Y has tariffs applied to it's products and that gives Company X a competitive advantage. The first problem here is 90% of all companies manufacture at TSMC - so practically all products become more expensive for Americans with no competitive advantage given to any company. The time taken to move TSMC fabs to America would be about 10 years (even if that could be done). By that time Trump will be long out of office and the tariffs will be dumped.
 
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