While the US tariff threat looms over chip firms, TSMC seems unlikely to see much of an impact, given that the firm's semiconductor sales to US entities account for a tiny portion.
TSMC's Push Towards Manufacturing In The US Puts It At a Prime Spot To See Exceptions From US Chip Tariffs
The industry sees chip tariffs under Section 232 as the 'kryptonite' for chip companies that work with the US, since high taxation in the semiconductor business means that the USG will gobble up the already slim profit margins. TSMC has voiced concerns about the possibility of chip tariffs on the firm, but with the Trump administration, the Taiwan giant could see relaxations, given their investments in America. However, another important factor here is that only 1% of TSMC's semiconductor products are involved in direct business with US entities.
Based on a report by Nikkei Asia, the head of Taiwan’s National Development Council claims that US tariffs won't have much of an impact on TSMC's business, given that the firm's investments in the region have reduced the ratio of chips being sourced from Taiwan, and direct business with US entities only accounts for 1% of the total production. More importantly, 75% of Taiwan's export goods are claimed to be unaffected by US tariffs, and the affected categories mainly include goods such as steel and aluminum.
Taiwan is pushing its chip companies to initiate manufacturing in America to avoid hefty tariffs, so there has been a widespread transfer of production volume from the East to the West. Firms like Foxconn, Quanta, Wistron, TSMC, UMC, and many others are now looking for ventures to produce in the US, which shows that President Trump's chip policies have definitely worked out, at least in playing the role of producing in America.
As far as Section 232 chip tariffs are concerned, TSMC is expected to be the least influenced since the firm has close relations with the Trump administration. However, considering the rapidly evolving USG policies, you never know what will happen next.
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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