US President Donald Trump has said that he will impose tariffs on semiconductors within the coming weeks.
When asked about the rate of the tariffs, Trump said: “It’ll be 25 percent and higher, and it’ll go very substantially higher over the course of a year.”
He added: “When they come into the United States, and they have their plant or factory here, there is no tariff.”
On average, it takes around three to four years to build a new chip fab. Furthermore, a 2023 report from the Semiconductor Industry Association estimates that by 2030 as production in the US ramps up, around 58 percent of predicted new jobs across semiconductor manufacturing and design risk being unfilled.
In January 2025, Trump pledged to “return production” of computer chips and semiconductors to the United States by imposing a “100 percent tax” on their overseas production, claiming that tariffs would incentivize companies to manufacture chips in the US instead of Taiwan.
Tariffs are paid by the importer, not the exporting nation.
During his January speech, Trump told House Republicans the tariffs would work as an incentive because “[chip companies are] not going to want to pay a 25, a 50, or even a 100 percent tax,” and added that the US government didn’t need to provide funding under the CHIPS and Science Act as the companies were “going to build their factory with their own money. We don’t have to give them money.”
Earlier this month, Trump announced he was preparing to unveil 25 percent tariffs on all steel and aluminum imports. As is the case for the data center sector, the tariffs could impact chip companies’ ability to build fabrication plants in the US as steel is a crucial material used across multiple applications within the construction process.
Historically, aluminum has also been key in semiconductor manufacturing and for many years was the most common material for metal interconnects in chips, although copper interconnects are now preferred.
This week, reports surfaced that US chip company Intel faced a split, with Broadcom and TSMC considering plans to acquire the chipmaker’s design business and factories, respectively.
While it had originally been reported that the Trump administration raised the idea of TSMC taking a controlling stake in Intel’s fabs, later reports claimed President Trump was unlikely to approve of a foreign company operating Intel’s US factories.
