Semiconductor Tariff Watch Under Trump: Winners, Risks, Unknowns
What changed
Previously, Trump stated that new tariffs would be imposed on semiconductors within the next two weeks, and hinted that the tariff rates could be as high as 200%-300%. However, a week has now passed, and the details of the tariffs have yet to be disclosed. The U.S. semiconductor stock sector remains shrouded in the shadow of this tariff uncertainty.
Policy contrast
~Biden's approach: subsidize "made in America" via CHIPS.
~Trump's approach: use tariffs to penalize offshore manufacturing and force reshoring. The goal is the same—strengthen the midstream where the U.S. lags.
What actually drives who pays
~Exemptions by company or by product?
U.S. customs generally tax imports by country of origin, not by corporate nationality. If exemptions cover only U.S.-made products, a company's offshore output could still be taxed unless there is a company-level carve-out.
~Origin rules for chips
For ICs, front-end wafer fabrication usually sets the origin; back-end packaging (CoWoS/2.5D/3D) rarely changes it. U.S. fab + offshore CoWoS typically remains U.S. origin; offshore fab + U.S. packaging typically remains foreign origin.
~Treatment of 9802 processing
If allowed, returns of U.S.-made wafers processed abroad could be taxed only on the foreign value add; if excluded, the bite is larger.
Two exemption questions to watch
U.S. companies' offshore fabs ( $Intel(INTC)$
Non-U.S. companies investing in the U.S. (TSMC AZ, Samsung TX): U.S. output is naturally exempt; whether Taiwan/Korea/Japan output is also exempt depends on the exemption layer.
Longer-term effects
~Supply-chain security improves for the U.S. market (US for US).
~Capability build-out accelerates in front-end and advanced packaging.
~Bloc-to-bloc supply hardens (US for US / China for China), raising the execution bar for non-U.S. fabs.
~Pricing and demand: higher effective BOM costs could bring near-term pull-ins and mid-term demand friction, depending on pass-through.
Positioning lens
~Near-term pressure on non-U.S. foundries/IDMs with high U.S. revenue mix and limited U.S. capacity.
Among non-U.S. names with sizable U.S. revenue mix ( $Tower Semiconductor (TSEM.US)$ / $United Microelectronics (UMC.US)$ / $STMicroelectronics (STM.US)$ / $NXP Semiconductors (NXPI.US)$ / $INFINEON TECHNOLOG (IFNNY.US)$ ), only Tower and $Taiwan Semiconductor (TSM.US)$ currently have U.S. front-end capacity underway; the rest have no U.S. fab build-out disclosed. UMC has said it has no plans to invest in a U.S. fab, focusing instead on collaborations (12nm platform at Intel's Arizona site).
~Relative beneficiaries: fabs and OSATs with U.S. lines ramping (TSMC AZ, $GlobalFoundries (GFS.US)$ , $Amkor Technology (AMKR.US)$ AZ, SK hynix IN HBM packaging, $Texas Instruments (TXN.US)$ Sherman).
TSMC quietly crossed a milestone in Q2: its Arizona subsidiary showed a positive "share of profits of investee" in the company's consolidated filing.
Tower already runs two U.S. 200mm fabs and has a new U.S. capacity corridor via Intel, where Tower plans to invest up to $300M in tools and assets.
~Within U.S. names, exposure hinges on how much front-end is still offshore for specific products.
What to watch next
~The final text—scope, rates, exemption definition (company vs product/origin), and 9802 treatment.
~Whether "made in America" will require both front-end and packaging onshore.
~The order-shift speed at key customers ( $NVIDIA (NVDA.US)$ , $Apple (AAPL.US)$ , $Advanced Micro Devices (AMD.US)$ , $Qualcomm (QCOM.US)$ ), which will govern real-world impact.
Bottom line
Until details land, treat tariff risk as import- and origin-driven. The market's winners will be the companies that secure exempt output fastest, not necessarily those with the loudest headlines.
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