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GlobalFoundries chief says tariffs could benefit US chipmakers

B

Barnsley

Well-known member
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GlobalFoundries Chief Executive Officer Thomas Caulfield said on Tuesday that U.S. tariffs on foreign-made chips could help U.S. chip manufacturers by boosting demand for domestically made chips.

Caulfield told an investor conference hosted by Morgan Stanley the $52.7 billion CHIPS and Science Act and an investment tax credit on chip-making equipment had helped boost U.S. capacity to make chips. Tariffs that would make foreign chips more expensive would help steer customers toward the chips being produced in U.S. factories, he added.

"I don't think one or the other is enough. I do believe you need (the) CHIPS (Act) and the (investment tax credit) to create the capacity, and the tariffs to kind of create the dynamics to make the demand want to come home," said Caulfield, who plans to transition to an executive chairman role next month.

https://www.channelnewsasia.com/bus...s-tariffs-could-benefit-us-chipmakers-4977321
 
Barnsley said:
https://www.channelnewsasia.com/bus...s-tariffs-could-benefit-us-chipmakers-4977321

GlobalFoundries Chief Executive Officer Thomas Caulfield said on Tuesday that U.S. tariffs on foreign-made chips could help U.S. chip manufacturers by boosting demand for domestically made chips.

Caulfield told an investor conference hosted by Morgan Stanley the $52.7 billion CHIPS and Science Act and an investment tax credit on chip-making equipment had helped boost U.S. capacity to make chips. Tariffs that would make foreign chips more expensive would help steer customers toward the chips being produced in U.S. factories, he added.

"I don't think one or the other is enough. I do believe you need (the) CHIPS (Act) and the (investment tax credit) to create the capacity, and the tariffs to kind of create the dynamics to make the demand want to come home," said Caulfield, who plans to transition to an executive chairman role next month.
Click to expand...


It's odd. Did Mr. Caulfield forget about Globalfoundries, the company he works for, has major manufacturing operations in Singapore and Dresden Germany? How can high tariffs on semiconductors is good for his company?
 
hist78 said:
It's odd. Did Mr. Caulfield forget about Globalfoundries, the company he works for, has major manufacturing operations in Singapore and Dresden Germany? How can high tariffs on semiconductors is good for his company?
Click to expand...
How many of the semis made in Germany or Singapore are sent back to US? I doubt if it is most. GF in New York & Vermont should benefit from the tariffs.
 
ChrisGar said:
How many of the semis made in Germany or Singapore are sent back to US? I doubt if it is most. GF in New York & Vermont should benefit from the tariffs.
Click to expand...

If semiconductor tariffs are imposed on the chips themselves (imported without being installed in a device), TSMC, Apple, Intel, and GlobalFoundries won’t need to worry too much because the import volume is relatively small. The real problem arises if tariffs are imposed on the final products, as the impact would be much greater. Even GlobalFoundries wouldn’t be immune to it.

With the potential for high tariffs and Trump's intention to repeal the CHIPS Act while cutting government subsidies and low interest loans for the semiconductor industry, I find Mr. Caulfield's comment quite strange. Unless he plans to leave GlobalFoundries and the semiconductor industry soon to start a new job in another field?
 
ChrisGar said:
How many of the semis made in Germany or Singapore are sent back to US? I doubt if it is most. GF in New York & Vermont should benefit from the tariffs.
Click to expand...
I am not sure what GF does in servers, smart phones or PCs. that is the majority of the market. What does GF sell to?
 
Will there be tariffs on wafers? Can TSMC (foundries) ship wafers to the US for packaging and avoid tariffs?
 
MKWVentures said:
what exactly does the tariff say? does it matter who the owner is? how is the value assigned? Surely someone know...
Click to expand...
I've been thinking about how Trump keeps shouting about tariffs, but it's like he's just learned the word. What about how they're imposed? the scope? all details? :confused:
 
hasty2333 said:
I've been thinking about how Trump keeps shouting about tariffs, but it's like he's just learned the word. What about how they're imposed? the scope? all details? :confused:
Click to expand...

Those are minor details.

All the masses need to know is that TARIFFS are being applied.

Any ideas how long before any impact is noticed?
 
Tariffs are assessed based on ‘Country of Origin’. This is where the material is made, not where it ships from. For tariff purposes, the U.S. typically considers the country of substantial transformation as the ‘country of origin’.

If you apply that logic to semiconductors, you can make all the wafers you want in the US, but when they ship to Asia for assembly and test, they are now ‘country of origin’ where the assembly and test was performed. If that happens to be in China, your US Fab’d wafers could come back to the US as chips with tariffs. As of today, that’s an extra 20% cost for the importer of record.

There are exceptions and loop holes, but those are the rules in concept.
 
gc_epictetus said:
Tariffs are assessed based on ‘Country of Origin’. This is where the material is made, not where it ships from. For tariff purposes, the U.S. typically considers the country of substantial transformation as the ‘country of origin’.

If you apply that logic to semiconductors, you can make all the wafers you want in the US, but when they ship to Asia for assembly and test, they are now ‘country of origin’ where the assembly and test was performed. If that happens to be in China, your US Fab’d wafers could come back to the US as chips with tariffs. As of today, that’s an extra 20% cost for the importer of record.

There are exceptions and loop holes, but those are the rules in concept.
Click to expand...

There are tons of "Made In China" goods made from 100% imported components, with minimal assembly
 
Tariffs on chips would be nearly impossible to implement in practice, according to this article
“The industry around the world has never dealt with chip tariffs like this before,” says a Taiwan-based semiconductor industry insider who publishes public commentary under the alias Hsu Mei-hu. “It's theoretically possible, but nearly impossible in practice.”
Click to expand...
The policy would force companies like Apple to ask every one of their suppliers about the cost of the many kinds of chips it uses, just to determine the appropriate amount of tariffs to declare. “And after it’s declared, how does the customs inspect it? If I just put a random value down, how would the customs know?” Hsu says.
Click to expand...
 
gc_epictetus said:
Tariffs are assessed based on ‘Country of Origin’. This is where the material is made, not wh it ships from. For tariff purposes, the U.S. typically considers the country of substantial transformation as the ‘country of origin’.

If you apply that logic to semiconductors, you can make all the wafers you want in the US, but when they ship to Asia for assembly and test, they are now ‘country of origin’ where the assembly and test was performed. If that happens to be in China, your US Fab’d wafers could come back to the US as chips with tariffs. As of today, that’s an extra 20% cost for the importer of record.

There are exceptions and loop holes, but those are the rules in concept.
Click to expand...

It can easily become complicated and very cumbersome with today's semiconductor supply chain and operations. For example, a chiplet may contain tiles and memory from different countries at different times and it may change from lot to lot. How do you put a value on it?

If a US business imported a chiplet made in Japan containing several American made semiconductor components, does US customs exclude the American made components in calculating the tariff?

Unless 100% everything is made in US and packaged in US, there are endless problems to impose high tariffs on semiconductors.
 
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hist78 said:
It can easily become complicated and very cumbersome with today's semiconductor supply chain and operations. For example, a chiplet may contain tiles and memory from different countries at different times and it may change from lot to lot. How do you put a value on it?

If a US business imported a chiplet made in Japan containing several American made semiconductor components, does US customs exclude the American made components in calculating the tariff?

Unless 100% everything is made in US and packaged in US, there are endless problems to impose high tariffs on semiconductors.
Click to expand...

It worth to note: Decades ago, it were Japanese companies who pioneered the scheme of doing close to no assembly in the mainland China to exploit China's lower tariff rates for export to USA.

Yes, before the tariff hike, China enjoyed lower tariff rates than Japan, classified as an underdeveloped country under WTO rules. That was before the multiple rounds of WTO mutual tariff lowering.
 
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