2025-08-07
Taiwan’s Semiconductor Industry Outlook Amid the U.S. 100% Tariff Surge in 2025
On August 6, 2025, U.S. President Trump announced a 100% tariff on all imported chips and semiconductor products, effective from August 7. This marks the largest tariff adjustment in recent years impacting the semiconductor industry, significantly affecting Taiwan’s semiconductor exports to the U.S. However, companies that have established or committed to building factories in the U.S. will be exempt, providing relief for key Taiwanese firms such as TSMC.
Detailed impacts of the tariff policy on Taiwan’s semiconductor sector include:
TSMC is actively expanding its new plant in Arizona, USA, benefiting from substantial tariff exemptions. The construction of the 4nm wafer fab has been completed, and mass production began by late 2024, helping the company avoid the impact of tariffs as high as 100%.
Companies like UMC and Vanguard International Semiconductor mitigate tariff risks through cooperation or U.S. factory setups.
The government and industry view equal tariff application as manageable due to Taiwan’s competitive technological advantage, believing the industry’s resilience will prevent major offshoring, focusing instead on global layout adjustments.
Despite a slight 0.12% decline in semiconductor equipment exports in H1 2025 due to lower demand from China and inventory adjustments, strong AI and HPC demands have maintained export momentum.
The U.S. tariff policy triggers global supply chain realignments, pushing firms to consider establishing or expanding U.S. production bases.
In conclusion, while the Trump administration’s tariff hike imposes short-term export pressures, partial exemptions and Taiwan’s robust semiconductor competitiveness sustain industry confidence. Taiwan’s semiconductor exports experienced double-digit growth in H1 2025, hitting historical highs supported by preceding stocking. Looking ahead, the industry will closely monitor U.S. Section 232 implementation and global supply chain shifts. Taiwanese firms will continue to strengthen U.S. production footprint and leverage technological leadership to remain a dominant global player. Concurrently, giants like Apple and Nvidia have announced increased U.S. investments, potentially driving Taiwan’s supply chain transformation and offering fresh opportunities.