While Trump's new trade policy will have its benefits, it won't prompt chipmakers to expand into the US since equipment procurement costs are said to grow tremendously.
Trump's Newest Tariffs Will Make It Difficult For Chipmakers To See The US As An Alternate Market, But It Will Benefit Domestic Firms Like Intel
Chip manufacturing in the US is a venture that is said to be difficult for offshore companies like TSMC, given that it comes with problems such as an immature market, higher operating costs, and inconsistent government policies. One of the objectives of Trump's tariffs is to bring back production to the US, but it seems like the latest rounds will lure away interest since, according to SemiAnalysis, the cost of producing nodes in the US could rise by 32% relative to Taiwan, which means that US-based chips will be a lot more expensive.
According to the report, the cost of setting up facilities has risen, given that Trump tariffs have made acquiring chip equipment much more expensive. A leading-edge node fab will now get the latest equipment, such as EUV scanners, for up to 15% more, which shows that the policy isn't friendly for US chip ambitions. Assuming that the rise in costs is passed onto the final wafer pricing, it could see a surge of up to 32%, meaning that producing in Taiwan would be much cheaper, even after the recent tariffs.
However, for domestic companies like Intel Foundry, Trump's tariffs could prove to be a "blessing in disguise," given that firms like Apple and NVIDIA will find it cheaper to source US-made chips from Intel instead of TSMC US. But with how the IFS is performing in terms of chip advancement, companies will have no choice apart from importing expensive chips if they were to manufacture them in the US, so this shows that the landscape in US's chip industry isn't very positive after the recent tariffs.
Trump recently claimed that they forced TSMC to expand into the US by "threatening" them with a 100% tariff rate, and while the Taiwan giant's commitment to the country seems like a huge step, the new trade policy has created further uncertainty about what the current administration wants. The supply chain is being dragged into geopolitical tensions, and the average consumer will ultimately have to pay the rise in costs.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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