100% semiconductor tariffs! For the market, there are more questions than answers now

According to CCTV News, Trump announced on Wednesday that he would impose a 100% tariff on semiconductor and chip imports, but would provide exemptions for companies that build factories in the United States. This policy targeting a critical industry worth over $600 billion has sparked widespread market attention, but analysts have pointed out that key details remain unclear.

Trump stated that the tariff policy would not apply to companies "building factories in the United States." Major chip manufacturers such as TSMC and Samsung, which have invested hundreds of billions of dollars in the U.S., saw their stock prices rise on Thursday, as the market anticipates that these companies may qualify for exemptions.

Reports indicate that a South Korean trade envoy stated that Samsung and SK Hynix would be exempt from the 100% tariff, driving up the stock prices of both companies. Analysts believe that this policy could further consolidate the market share of large chip manufacturers.

However, the specific scope of the policy, exemption criteria, and its impact on the complex semiconductor supply chain remain highly uncertain, posing challenges for investors and industry participants.

Large Manufacturers May Be the Winners

One of the most pressing questions for the market is how much manufacturing capacity companies need to invest in the U.S. to qualify for tariff exemptions.

James Sullivan, head of Asia Pacific equity research at JP Morgan, stated in a media interview that this could mean most major chip manufacturers will qualify for exemptions. If this is the case, the policy could have the effect of "continuing to consolidate the market share of large-cap companies in this sector."

Asian chip companies like TSMC, which have significant investments in the U.S., saw their stock prices rise during Thursday morning trading following Trump's announcement. TSMC announced earlier this year that it would expand its investment in the U.S. to $165 billion.

Stock prices for South Korea's Samsung and SK Hynix also rose, as both companies have committed to investing in factories in the U.S. Reports indicate that the South Korean trade envoy stated that these two companies would be exempt from the 100% tariff.

Exemption Scope Remains Unclear

Aside from the exemption issue, many other aspects of the potential tariff policy remain unclear.

Stacy Rasgon, a senior semiconductor analyst at Bernstein, pointed out on a CNBC program that most semiconductors entering the U.S. are included in consumer products such as smartphones, PCs, and automobiles.

According to data from the Information Technology and Innovation Foundation, the U.S. imported $46.3 billion in semiconductors in 2024, accounting for about 1% of total U.S. imports.

Rasgon stated that while imposing tariffs on these imported products may be manageable, broader tariffs would be more difficult to address. "We don't know if Trump's comments on tariffs are only aimed at raw semiconductors? Will tariffs be imposed on end devices? Will tariffs be imposed on components within end devices?" In April, the U.S. Department of Commerce launched a national security investigation into semiconductor technology imports, just as the semiconductor industry had recently received exemptions from Trump's "reciprocal" tariffs, which has intensified confusion and questions regarding chip tariffs.

Complex Supply Chains Present Challenges

Potential tariff strategies may also become complicated due to the intricate and interdependent nature of the semiconductor supply chain.

Rasgon cites U.S. chip design company Qualcomm as an example, which sends designs to TSMC for manufacturing in Taiwan and then imports them back to the U.S. "Does this mean that these chip imports won't be taxed because they are manufactured by TSMC, which is building a factory in the U.S.? I don't know. I hope so."

Another major buyer of U.S. semiconductors is cloud service providers like Amazon Web Services and Google, which are crucial to Washington's AI initiatives.

According to a recent report by ITIF, semiconductors contribute $7 trillion annually to global economic activity by supporting a range of downstream applications, including AI and "big data."

In a potential sign of U.S. companies seeking to relocate the chip supply chain to the U.S., Apple CEO Tim Cook announced on Wednesday at the White House, alongside Trump, that the company would source chips from Samsung's manufacturing facility in Texas. The company also announced an additional investment of $100 billion, raising its total investment commitment in the U.S. over the next four years to $600 billion