President Donald Trump’s latest tariff threats—100% duties on imported semiconductors and related goods—have already begun reshaping the landscape of the global chip sector. While tech giants like Apple appear shielded, most of the industry faces deep uncertainty.
On August 14, Trump announced that companies building semiconductor production capacity inside the U.S. may be exempt from these steep tariffs. Apple, which raised its U.S. investment pledge from $500 billion to $600 billion, was immediately named as a beneficiary.
But Apple is the exception, not the rule.
A Patchwork of Winners and Losers
The new probe, under Section 232 of the Trade Expansion Act, targets not only chips but also manufacturing tools, materials, and even devices containing semiconductors. For smaller firms—especially those without U.S. production capacity or lobbying power—the looming 100% tariff could mean a dramatic rise in costs or loss of U.S. market access.
Nicolas Gaudois of UBS notes that any vendor unable to prove substantial U.S. investment may face the full tariff. That’s a major problem for the hundreds of Apple’s Asian suppliers, particularly in Japan and Taiwan, many of whom have no capacity or financial flexibility to relocate production to the U.S.
Opaque, Ad-Hoc Policy
Executives and analysts are frustrated by the unpredictability of Trump’s approach. As one executive told the FT: “Trump decides. He conducts policy extortion.” Even chipmakers with existing U.S. capacity are unsure whether they qualify for exemptions.
The current probe is expected to last until December 2025, within the 270-day limit set by Commerce Department rules. However, delays are already emerging. Originally scheduled to conclude in August, Commerce officials now say several more weeks are needed due to the probe’s complexity.
Major Investments—and Exemptions
Some companies are likely to escape the worst.
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TSMC has pledged up to $165 billion for fabs in Arizona.
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Samsung is investing heavily in Texas.
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Apple—via Foxconn and server-related projects—has promised $600 billion in total U.S. investment.
These moves, however, are not purely organic. In many cases, investment pledges are stitched together from older or unrelated projects, creating what analysts call a “hodgepodge” strategy for tariff avoidance.
Country-Level Deals Also in Play
Parallel to company-specific exemptions, Washington is negotiating country-level agreements with key allies. These include:
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EU – received a general 15% tariff rate for chips and pharmaceuticals.
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South Korea – confirmed verbal agreement on chip exemptions.
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Japan and Taiwan – negotiations ongoing, with strong pressure from affected companies.
Still, precedent shows these deals may not last. For example, the steel sector saw exemptions granted in 2018 under a Section 232 probe—only to be revoked in 2024.
A Risky Gamble on U.S. Manufacturing
The semiconductor supply chain is vast and interconnected. Executives warn that raising costs for equipment and materials—such as EUV machines, specialty chemicals, and rare earths—could actually undermine Trump’s goal of bringing chip production to the U.S.
In fact, in 150+ public comments submitted to the Commerce Department, this was the top concern. The Taiwanese government wrote that rising costs of U.S. manufacturing would “directly affect investment willingness.”
The Road Ahead
If implemented as described, the 100% tariff could:
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Create major disparities between companies with and without U.S. fabs
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Reshape global supply chains, especially in Asia
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Trigger retaliation or instability in allied trade relations
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Increase consumer prices on electronics globally
With global chip demand projected to surpass $1 trillion by 2030, and geopolitical risks mounting, President Trump’s Section 232 probe will remain one of the most consequential—and contested—economic policies of the decade.