Trump introduces 25% tariff on export of chips, including Nvidia H200, AMD MI325X
In the recent Taiwan-U.S. trade deal, America agreed to cut import tariffs from Taiwan to 15% in exchange for Taiwanese companies investing $250 billion in the American chip industry. Specifically, it will allow them to import 2.5 times the new facilities' planned capacity tariff-free, during the construction period. Companies that have already built capacity in America will receive 1.5 times those facilities' capacity in tariff exemptions.
The idea is that TSMC and other Taiwanese firms that invest in the U.S. will allocate their tariff-exempt chips to hyperscaler AI companies like Google, Microsoft, Amazon, and Meta. But since the math on the investment scale and how that relates to chip allocations is so hazy, there are still many details to be worked out. Much of it depends on what kind of fabrication capacity TSMC can project it will reach within the next two years.
To date, TSMC has pledged to invest $165 billion in building chip fabrication capacity in America. It is reportedly quite nervous about further expansion, considering the fears of an AI bubble, and the U.S. government's own investment in TSMC competition, like Intel . If demand for chip fabrication falls dramatically in a year or two because of a change in the winds of global development, TSMC could be left with unneeded production capacity that isn't even online yet, in a similar fashion to memory suppliers a few years ago following the pandemic boom.
TSMC and other Taiwanese chip firms are now towing a similar line to major U.S. companies and international governments on working with the current White House team. Engaging with complex trade practices is an important component of maintaining strong financial and trade opportunities in the near term. But the weaker long-term strategic thinking of the Trump administration risks dragging down any firms that rely too heavily on its coercive suggestions on longer-term planning.
Although major U.S. investment is coming, TSMC may need to tread carefully to avoid falling afoul of the risks on either side of the equation.
Jon Martindale is a contributing writer for Tom's Hardware. For the past 20 years, he's been writing about PC components, emerging technologies, and the latest software advances. His deep and broad journalistic experience gives him unique insights into the most exciting technology trends of today and tomorrow. ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-13/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Jon Martindale Freelance Writer Jon Martindale is a contributing writer for Tom's Hardware. For the past 20 years, he's been writing about PC components, emerging technologies, and the latest software advances. His deep and broad journalistic experience gives him unique insights into the most exciting technology trends of today and tomorrow.
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Reference reading
- https://www.tomshardware.com/tech-industry/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/u-s-government-plans-tariff-exemptions-for-tsmc-if-it-follows-through-on-american-investment-usd165-billion-already-pledged-to-increase-production-capacity-but-details-of-the-deal-are-still-murky#main
- https://www.tomshardware.com
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