Trump Tariffs Shake Asian Chip Stocks

New U.S. Levy Exempts Domestic Builders, Causing Market Jitters

Asia’s semiconductor sector experienced a mixed trading session as U.S. President Donald Trump unveiled a sweeping 100% tariff on chip imports. The significant levy, however, includes an exemption for companies actively investing in or committed to manufacturing within the United States.

Market Reaction Varies by Region

Japanese chipmakers faced immediate pressure, with Tokyo Electron shares dropping over 5% before recovering slightly to a 2.9% decline. Renesas Electronics fell 4% at the open, and Advantest saw a 3.3% dip, reflecting investor uncertainty over the new trade policy’s impact.

Conversely, South Korean giants Samsung and SK Hynix appeared positioned for exemption, according to the nation’s top trade envoy. SK Hynix rebounded after an initial drop, while Samsung Electronics saw its shares climb 2.47% amid news that Apple will utilize Samsung chips manufactured in the U.S.

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chip supplier, also began trading higher, with its stock rising over 4%. TSMC has recently announced substantial investments in U.S. semiconductor production, including a $65 billion commitment for three Arizona plants.

Details of Exemption Remain Unclear

President Trump stated during a White House briefing, “We’re going to be putting a very large tariff on chips and semiconductors. But if you’re building in the United States of America, there’s no charge.” Specific requirements for qualifying for this domestic manufacturing exemption, however, are yet to be clarified.

“The devil is in the details” as there is no clear framework yet on how exactly the chip tariffs are going to work.

—Ernie Tedeschi, Director of Economics at The Budget Lab at Yale

Experts suggest the tariff announcement could create volatility. Andrew Jackson, head of Japanese equity strategy at ORTUS Advisors, noted that while Japanese equipment suppliers might initially falter, the policy could ultimately benefit firms whose machinery is crucial for expanding U.S. chip output.

Industry analysts highlight that large corporations with significant U.S. investment plans are the immediate beneficiaries. Daniel Newman, CEO of The Futurum Group, identified companies like Apple, Nvidia, and TSMC as clear winners, possessing the capital to meet the exemption criteria. “These are the big wins that President Trump wants to get,” Newman remarked, suggesting smaller firms will face negotiation challenges.

The global semiconductor market, valued at over $580 billion in 2023, now navigates this new U.S. policy landscape. The long-term effects will depend on the clarity and enforcement of the domestic manufacturing exemption, potentially reshaping global supply chains and investment strategies.