US Tariff Shakeup: Taiwan’s Chip Production Faces Strategic Shift

President Trump announced a potential 100% tariff on semiconductor imports, pressuring Taiwan's chipmakers to move operations to the US. This move may increase costs and affect consumer electronics prices. TSMC might be exempt due to its significant US investment, highlighting a competitive shift in the semiconductor industry.

President Donald Trump's proposed 100% tariff on imported semiconductors is poised to provoke a strategic re-evaluation among Taiwanese chip manufacturers, potentially shifting more operations to US soil, according to Focus Taiwan.

Liu Pei-chen, a researcher at the Taiwan Institute of Economic Research, remarked that Trump's tariff tactic marks a transition from incentive-based policies to punitive measures that force companies to invest in the US. The new approach involves both tax incentives for domestic production and import tariffs, likely accelerating American investments by global chipmakers and increasing costs across supply chains.

Trump's abrupt announcement created ripples within the global tech industry, particularly concerning Taiwan Semiconductor Manufacturing Co (TSMC), which could potentially dodge the tariff. As explained by Derek Scissors of the American Enterprise Institute, TSMC's substantial US investments might secure an exemption. The market responded swiftly, with TSMC's shares hitting record highs in Taipei following the announcement.

(With inputs from agencies.)