2 days Ago By Tyler Lee
TSMC’s $100 billion investment in the US was supposed to help put the company in President Donald Trump’s good graces—or was it? Despite TSMC’s eye-watering investment, there is a chance that the company could still end up paying tariffs on its chips, which is part of Trump’s plan to bolster the US economy by encouraging local manufacturing and production.A play on words“By doing it here, he has no tariffs,” said Trump to reporters, referring to TSMC and its CEO, C.C.
Wei. However, according to a person familiar with the matter, this might simply be a play on words. Yes, TSMC making its semiconductors in the US wouldn’t result in tariffs—that much is obvious.
But at the same time, it doesn’t mean the company won’t escape tariffs on its products imported from overseas, like China.The Trump administration is currently deliberating the idea of imposing chip tariffs on TSMC and other Taiwanese chipmakers. This could result in tariffs as high as 100%.
In one version of the plan, officials propose applying these tariffs not just to the chips themselves but also to products using them, such as Apple’s iPhones. If Apple’s iPhones weren’t expensive enough, these tariffs could push their prices through the roof.It’s not so easyHowever, there is a chance that these tariffs, if implemented at all, would be as effective as Trump hopes.
This is due to how the semiconductor supply chain works. The semiconductor industry relies on components made by companies all over the world. If Trump imposes 100% tariffs on imports from Taiwan, companies will find a workaround to bypass the restrictions.
For example, they could assemble its chips in a different part of the world. That is, unless Trump decides to impose tariffs on all countries.These tariffs might also not be as devastating as one would think.
According to Chris Miller, a history professor at Tufts University, “TSMC might make a bit less money, the fabless company that designs the chips might make a bit less money, and the end company that actually sells the products that the chip is assembled into might also find their product margin squeezed.”Taiwan-based semiconductor industry insider, known by the alias Hsu Mei-hu, also expressed their doubts about these tariffs. “The industry around the world has never dealt with chip tariffs like this before.
It’s theoretically possible, but nearly impossible in practice.”The post TSMC's US $100 billion investment wouldn't save it from all tariffs appeared first on Android Headlines..
