The German media outlet Table.Media published a report in February 2025 titled “Chips: The U.S. Increases Tariffs on Taiwan – Who Pays the Real Price?” The article focuses on the Trump administration’s potential imposition of punitive tariffs on Taiwan’s semiconductor industry and cites comments from DSET Non-Resident Fellow Chiang Min-yen.
Taiwan to Expand U.S. Investment in Response to Trump’s Tariff Threat
Since the election campaign, U.S. President Donald Trump has repeatedly threatened to impose high tariffs on Taiwanese semiconductors, possibly up to 100%, in an effort to force chip manufacturing back to the U.S. However, the exact implementation details and targeted products remain unclear.
In response, Taiwan’s President Lai Ching-te recently convened a national security meeting and subsequently announced plans to expand investment in the U.S. while strengthening bilateral cooperation in artificial intelligence and advanced semiconductors. President Lai also emphasized that Taiwan is a critical partner in the U.S.’s efforts to rebuild its manufacturing industry and solidify its leadership in high-tech sectors.
Complex Semiconductor Supply Chains Pose Challenges for Tariff Implementation
Regarding the feasibility of these tariffs, DSET non-resident fellow Chiang Min-yen pointed out that taxing mature semiconductors poses significant technical complexities. due to the complexity of the supply chain. He gave an example: if the U.S. imports an electronic device containing Taiwanese chips, customs officials may need to calculate the proportion of the total cost attributed to those chips and determine how many originate from Taiwan.
On the other hand, when it comes to the most advanced chips, Hsu Tsun-Tzu, Director of the Taiwan-ASEAN Studies Center at the Chung-Hua Institution for Economic Research, noted that the additional import costs would likely be borne by importers like Nvidia and Apple, as well as consumers. She added, “Since U.S. companies have no alternative sources for advanced chips, the tariffs may impact the U.S. far more than Taiwan.”
However, Chiang Min-Yen also stated, “Although TSMC itself may not directly bear these tariffs, it must still consider the rising costs and supply chain impacts.” For TSMC, managing political relationships effectively is crucial to maintaining supply chain stability.
TSMC Strengthens U.S. Presence to Mitigate Political Risks
To address policy risks, TSMC has accelerated its investment in the U.S. According to a Financial Times report, TSMC is considering expediting mass production at its Arizona facility. Additionally, market speculation suggests that TSMC may transfer advanced packaging technology from Taiwan to Texas to ensure that the entire supply chain can be covered within the U.S.
DSET will continue to monitor developments in this issue and provide further analysis.