U.S. Tariff Policies Threaten Global Semiconductor Supply Chain

2025-02-20 business

Brussels, Thursday, 20 February 2025.
Recent U.S. tariff policies, targeting Taiwan semiconductors, significantly impact global supply chains, pushing European markets to strategize amid expected cost increases and supply disruptions.

Immediate Market Impact

Former President Trump’s proposed tariffs of up to 100% on Taiwanese semiconductors [1][2] have sent shockwaves through the global tech industry. Taiwan, which produces approximately 60% of global chips and over 90% of leading-edge semiconductors [7], faces potential severe market disruptions. Analysis suggests these tariffs could increase U.S. logic chip prices by up to 59% [2], with ripple effects across global markets. Current consumer demand for semiconductors has already shown weakness [1], and industry experts warn that additional tariffs could further suppress market growth.

Strategic Response from Taiwan

In response to mounting pressure, Taiwan’s President Lai Ching-te has outlined a proactive approach to address these challenges. The country has pledged to enhance communication with the U.S. and has proposed a ‘global semiconductor democratic supply chain partnership initiative’ [5]. Notably, over 40% of Taiwan’s overseas investments are now directed toward the United States [5], demonstrating a strategic pivot to maintain crucial trade relationships. TSMC, the world’s largest chipmaker, is already investing $65 billion in three Arizona facilities [2], showing commitment to maintaining strong ties with the U.S. market.

Global Supply Chain Implications

The semiconductor industry faces a complex restructuring as Trump’s administration plans to announce implementation details by April 2, 2025 [3][4]. The global impact is magnified by concurrent investigations into Chinese semiconductor practices, with the USTR conducting a Section 301 investigation [10]. The U.S. semiconductor industry, which showed 19% growth in 2024 [1], now faces uncertainty. Industry experts predict the total addressable market for AI accelerator chips could reach 500 billion by 2028 [1], making the stability of the supply chain crucial for future growth.

Industry Response and Future Outlook

Major stakeholders are actively adapting to the changing landscape. The bipartisan CHIPS Act has already spurred over $450 billion in investments in U.S. semiconductor and electronics sectors [2]. However, industry experts caution that building and operating U.S. semiconductor fabs costs approximately 30% more than Asian competitors [2]. The sector faces additional challenges with Deloitte identifying key 2025 concerns including generative AI accelerator chips, global labor shortages, and escalating geopolitical tensions [1]. These factors collectively suggest a period of significant adjustment for the global semiconductor industry.

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tariff policies semiconductor impact