Trump’s Import Tariffs will Have Minimal Impact on Semiconductor Exports, Taiwan Says

Taiwan says it does not expect tariffs imposed by US President-elect Donald Trump to have a significant impact on chip exports. The Asian company says the impact on Taiwan semiconductor exports will be minimal because of their technological superiority, Reuters reported.

Economic Growth Warning

Taiwan is home to Taiwan Semiconductor Manufacturing Company (TSMC), which is the biggest contract chip producer in the world. This makes the Asian island country an important link to the global tech supply chain for big companies such as Nvidia and Apple.

“For our semiconductors and advanced processes, there is an advantage of technological leadership that cannot be replaced, and so the impact will be small, “Taiwan’s Economy Minister Kuo Jyh-huei said.

But even as Jyh-huei downplays the impact of Trump chip tariffs, Taiwanese policymakers have cautioned that new tariffs could affect the growth of the country’s export-dependent economy. Trump has said he will introduce a 10% blanket tariff on imports entering the US market from around the world.

In November last year, the President-elect said a 25% tariff will be introduced on imports from Mexico and Canada. For Chinese goods, the incoming president has said a 60% tariff will be introduced.

Shifting Supply Chains

As a way of circumventing high Taiwan chip export tariffs, the country says it would consider relocating supply chains to the country if needed.

“Now we see that we should be able to develop the aerospace supply chain industry in the United States, and do some joining up with the US aerospace companies, so that some of Taiwan’s aerospace research and development centres can be moved there,” Kuo Jyh-huei added.

The Asian country is also eying Japan. The country plans to establish an office in Japan within the first half of 2025 to enable Taiwanese companies to invest in the country and build partnerships in the development of drones and AI.

US Investments

Taiwanese chip manufacturing companies that produce semiconductors in the US have benefited immensely from Chips Act funding. In October 2024, the US Department of Commerce finalized a $6.6 billion award to Taiwan’s largest contract chipmaker, TSMC under the Chips Act. The Department also finalized a $406 million Chips Act funding for Taiwanese chip manufacturer GlobalWafers to boost its silicon wafer production in the country.

But investment isn’t the only thing that Taiwanese chip makers in the US are attracting. An earnings report released on January 10, 2025, shows that quarterly revenues for TSMC surpassed analyst expectations after hitting the $26.3 billion mark. This positive performance reinforced investor confidence even as hopes of continued spending in 2025 remain rife.

The go-to chip producer for Apple and Nvidia maintained a strong performance, reporting a 39% revenue increase in the October-December 2024 quarter. TSMC stocks surged by 7% following the positive operational and financial performance as well as the company’s potential to expand.

Last month, TSMC commenced talks with AI chip maker Nvidia Corp to manufacture Blackwell chips at its new Arizona factory. TSMC plans to commence operations in the new facility this year.