This is the only actually big newsworthy item in the semi space of the last month. The tariff was is triggering a massive cost increase for American ICs which don't have any domestic Chinese competition. Unlike USA, PRC was zealous enough to actually dig down to an actual source of the ICs down to wafer, and enforce tariff based on that.
I see TI shifting more wafer orders for consumer goods from USA to their fabs in Japan very soon.
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Credit: AFP
As President Donald Trump accelerates reshoring efforts, US-based chipmakers are facing rising cost pressures that are now cascading through the global supply chain. Texas Instruments (TI) has rolled out its largest-ever price hike to Chinese customers, raising prices on more than 60,000 products by 10% to over 30%, leaving distributors and end-users blindsided.
While TI's official notice lists August 15 as the effective date, several Chinese customers say the new pricing has already been applied since August 4. The sharp price hike reflects growing "IC inflation" across end markets and underscores how China's stricter chip traceability rules are raising import hurdles, prompting US chipmakers to shift costs downstream.
Chinese distributors report industrial components like digital isolators and isolation drivers have surged over 25%, with some older low-dropout regulators (LDOs) climbing as much as 30%.
Analysts view the hike as a structural shift in TI's pricing, raising legacy chip prices to push adoption of newer, higher-margin products. One 2018-era DC-DC converter, for example, has risen 22%.
Second, TI's latest earnings show mid-single-digit growth in automotive, driven largely by China. Automotive-grade PMICs rose 18–25%, while battery management system (BMS) isolators for EVs climbed 22%.
Third, consumer and telecom chips were also affected, with fast-charging ICs and RF front-end chips rising 5–15%.
Industry sources cite rising US manufacturing costs and geopolitical tensions as key drivers. TI's China margins have long lagged its global average due to past discounting, and the new pricing signals a shift toward profitability over market share.
The hike also suggests inventory turnover has normalized, with clearer visibility into automation and automotive demand, positioning TI's move as a bellwether for changing market dynamics.
The new rule adds import pressure for US-based chipmakers like TI, Microchip, and Onsemi, making price hikes all but inevitable.
Analysts warn the move may trigger ripple effects. Firms like Analog Devices, Inc. (ADI) could follow, while downstream customers are likely to speed up inventory clearance and adjust supply chains.
The price surge on imported ICs is giving Chinese analog chipmakers an opening. SG Micro, 3Peak Incorporated, and Chipsea Technologies (Shenzhen) are moving fast to offer more cost-effective industrial and automotive alternatives.
TI triggered a price war in China in 2023, squeezing local competitors. This sweeping hike marks the end of that phase and could signal a broader reset driven by US manufacturing costs and Chinese import rules, with China's analog chip market likely headed for a reshuffle.
Article edited by Jack Wu
I see TI shifting more wafer orders for consumer goods from USA to their fabs in Japan very soon.
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TI triggers largest chip repricing in years, stuns China clients with 60,000-part hike
Staff reporter, Taipei; Levi Li, DIGITIMES AsiaThursday 7 August 20250
Credit: AFP
As President Donald Trump accelerates reshoring efforts, US-based chipmakers are facing rising cost pressures that are now cascading through the global supply chain. Texas Instruments (TI) has rolled out its largest-ever price hike to Chinese customers, raising prices on more than 60,000 products by 10% to over 30%, leaving distributors and end-users blindsided.
While TI's official notice lists August 15 as the effective date, several Chinese customers say the new pricing has already been applied since August 4. The sharp price hike reflects growing "IC inflation" across end markets and underscores how China's stricter chip traceability rules are raising import hurdles, prompting US chipmakers to shift costs downstream.
Massive and sweeping price hikes shock Chinese clients
Unlike the targeted hikes in June covering 3,300 products, this round spans nearly all categories — from industrial control and automotive electronics to consumer and telecom chips.Chinese distributors report industrial components like digital isolators and isolation drivers have surged over 25%, with some older low-dropout regulators (LDOs) climbing as much as 30%.
Analysts view the hike as a structural shift in TI's pricing, raising legacy chip prices to push adoption of newer, higher-margin products. One 2018-era DC-DC converter, for example, has risen 22%.
Industrial and automotive sectors hardest hit
TI's pricing adjustments show three clear trends. First, industrial control chips — over 40% of its portfolio — saw broad-based and significant increases. For example, a 16-bit ADC chip used in factory automation jumped from US$3.20 to US$4.10, up 28%.Second, TI's latest earnings show mid-single-digit growth in automotive, driven largely by China. Automotive-grade PMICs rose 18–25%, while battery management system (BMS) isolators for EVs climbed 22%.
Third, consumer and telecom chips were also affected, with fast-charging ICs and RF front-end chips rising 5–15%.
Industry sources cite rising US manufacturing costs and geopolitical tensions as key drivers. TI's China margins have long lagged its global average due to past discounting, and the new pricing signals a shift toward profitability over market share.
The hike also suggests inventory turnover has normalized, with clearer visibility into automation and automotive demand, positioning TI's move as a bellwether for changing market dynamics.
China's traceability rules push up import costs
China's CSIA now mandates that chip import duties be based on wafer origin, effectively requiring a "birth certificate" for each IC. The policy gives China deeper sourcing visibility and room for future retaliation.The new rule adds import pressure for US-based chipmakers like TI, Microchip, and Onsemi, making price hikes all but inevitable.
Analysts warn the move may trigger ripple effects. Firms like Analog Devices, Inc. (ADI) could follow, while downstream customers are likely to speed up inventory clearance and adjust supply chains.
The price surge on imported ICs is giving Chinese analog chipmakers an opening. SG Micro, 3Peak Incorporated, and Chipsea Technologies (Shenzhen) are moving fast to offer more cost-effective industrial and automotive alternatives.
TI triggered a price war in China in 2023, squeezing local competitors. This sweeping hike marks the end of that phase and could signal a broader reset driven by US manufacturing costs and Chinese import rules, with China's analog chip market likely headed for a reshuffle.
Article edited by Jack Wu
TI triggers largest chip repricing in years, stuns China clients with 60,000-part hike
As President Donald Trump accelerates reshoring efforts, US-based chipmakers are facing rising cost pressures that are now cascading through the global supply chain. Texas Instruments (TI) has rolled out its largest-ever price hike to Chinese customers, raising prices on more than 60,000...
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