Taipei, Aug. 7 (CNA) A proposed 100 percent tariff on chip imports announced by U.S. President Donald Trump could shift more of Taiwan's semiconductor production overseas, an expert said Thursday.
Liu Pei-chen (劉佩真), a researcher at the Taiwan Institute of Economic Research's (TIER) Taiwan Industry Economics Database, said in a telephone interview with CNA that Trump's tariff policy will accelerate the global semiconductor industry's pace to establish roots in the U.S., leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand.
Trump's move signals his intention to "restore the glory of the U.S. semiconductor industry," Liu noted, saying that Trump previously used a "carrot" strategy with incentives such as raising investment tax credits for chipmakers to 35 percent to encourage semiconductor manufacturing investments.
Now he is deploying the "stick" -- imposing punitive tariffs unless companies invest in the U.S., she added.
However, with Trump stating that there would be "no charge" for those firms that are "building in the United States of America," Liu said that the planned tariffs will have a limited impact on Taiwan Semiconductor Manufacturing Co. (TSMC).
TSMC, which currently has facilities in Arizona, pledged to invest an additional US$100 billion to expand its semiconductor manufacturing operations in the United States in March.
This dual approach could pressure global chipmakers to accelerate their U.S. investments. As a result, this will inevitably raise costs across the semiconductor supply chain and drive up prices of end-user electronics and introduce further uncertainty to the semiconductor market, according to Liu.
Noting that the U.S. is the largest global market for AI and high-performance computing (HPC) applications, Liu said that imposing such broad tariffs could influence where semiconductor companies choose to deploy advanced process facilities to avoid high U.S. tariffs.
Liu said that as the U.S. supply chain remains incomplete -- especially in terms of imported semiconductor equipment and materials-- the cost of building fabs in the country could be potentially pushed up.
She added that the current competitive landscape in the foundry industry remains intact because major companies like TSMC, Intel and Samsung -- all of which are investing in U.S. facilities -- would be exempt from the tariff, meaning the competitive playing field has remained unchanged.
However, Liu noted that the tariff policy could prompt more TSMC suppliers and related firms to set up operations in the U.S. in response. This could lead to a decline in Taiwan-based semiconductor production and potentially affect employment, wages and local investment in Taiwan-- a trend worth monitoring.
