U.S. President Donald Trump announced a 100% tariff on semiconductor and chip imports, with an exemption for companies "building in the United States."

Semiconductors are a $600 billion industry central to the modern digital economy.

However, many details of the policy remain unclear, leaving businesses and experts uncertain about its full impact.

Uncertainty Surrounding Exemptions and Policy Details

Experts note the final tariff rules are still being drafted. Ray Wang, research director at The Futurum Group, said, “It’s still too early to pin down the impact of the tariffs on the semiconductor sector. The final rule is likely still being drafted, and the technical details are far from clear at this point.”

One key question is how much U.S. manufacturing is needed to qualify for the exemption.

Impact on Major Semiconductor Manufacturers and Market Consolidation

Since 2020, companies like TSMC and Samsung Electronics have committed hundreds of billions of dollars to build plants in the U.S. James Sullivan of J.P.

Morgan said this could mean most major chip manufacturers qualify for exemptions, potentially “continuing to consolidate market share amongst the largest cap players in the space.”

Shares of TSMC, Samsung, and SK Hynix rose following Trump’s announcement.

Complexities of Semiconductor Supply Chains and Tariff Implications

Most semiconductors entering the U.S. are embedded in consumer goods such as smartphones, PCs, and cars.

Stacy Rasgon of Bernstein asked, “What we don’t know with [Trump’s] comments on tariffs, is it just raw semiconductors? Are there going to be tariffs on end devices? Are you going to be looking at tariffs on components within end devices?”

The semiconductor supply chain is intricate. For example, Qualcomm designs chips in the U.S., but manufacturing happens at TSMC in Taiwan, raising questions about tariff application.

Broader Economic Effects and U.S. Investment Commitments

Semiconductors contribute $7 trillion annually to the global economy. Cloud providers like Amazon Web Services and Google rely on them to power AI and big data initiatives.

Apple CEO Tim Cook, speaking alongside Trump at the White House, announced Apple will source chips from Samsung’s Texas plant and invest an additional $100 billion in the U.S., bringing its total investment to $600 billion over four years.

PHOTO: THE WASHINGTON POST/GETTY IMAGES

This article was created with AI assistance.