TOKYO: Donald Trump’s threat to impose 100 per cent tariffs on semiconductor imports shook up Asian chip firms on Thursday (Aug 7), but sector giants TSMC and Samsung were boosted after he pledged to exempt those who invest in the United States.
The US president made his warning ahead of the imposition of sweeping tariffs on goods from dozens of countries, and it comes amid a global race to develop high-end chips used for artificial intelligence.
“We’ll be putting a tariff of approximately 100 per cent on chips and semiconductors, but if you’re building in the United States … there’s no charge,” he said at the White House.
He did not give a timetable for the new levy being enacted.
In Japanese trade, Tokyo Electron, a major producer of chipmaking equipment, plunged more than 2 per cent on the news, while chipmaker Renesas sank 3.8 per cent.
Precision tools maker Disco Corporation gave up 1.8 per cent.
However, Taipei-listed TSMC – the world’s largest contract maker of chips, which counts Nvidia and Apple among its clients – soared nearly 5 per cent as Taiwan said it would not be affected by the new tariffs.
“Because Taiwan’s main exporter is TSMC, which has factories in the United States, TSMC is exempt,” National Development Council chief Liu Chin-ching said in parliament.
Some Taiwanese chipmakers “will be affected” by the 100 per cent tariff, but their competitors will also face the same levy, he added.
TSMC, which is ramping up manufacturing in Arizona, has pledged to invest as much as US$165 billion in the United States, which the firm said in March was the “largest single foreign direct investment in US history”.
Seoul-listed Samsung, which is also pumping billions into the world’s number one economy, rose more than 2 per cent while South Korean rival SK hynix was up more than 1 per cent.
“The highest-end semiconductors will be excluded” but “this kills producers of low-end chips”, including those based in Malaysia or China, Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis, told AFP.
Arisa Liu, senior semiconductor researcher at the Taiwan Institute of Economic Research, said the announcement “will impact the future strategic direction of global semiconductor companies”.
“Since the United States is the world’s largest player in AI and related high-performance computing, this will have a relatively greater impact on companies involved in advanced processes,” she said.
But Samsung and TSMC should be eligible for the exemption, she added.
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