President Donald Trump has pledged to impose tariffs on imports from Taiwan, a move that could affect industries such as semiconductors and pharmaceuticals, including Taiwan Semiconductor Manufacturing Co. TSM, the world’s largest contract chipmaker.
What Happened: Speaking at a Republican retreat in Miami on Monday, Trump criticized Taiwan’s dominance in semiconductor manufacturing and the Former President Joe Biden administration’s CHIPS Act, which provided $53 billion in subsidies to boost domestic chip production.
TSMC, which supplies chips to major tech firms including NVIDIA Corp. NVDA and Apple Inc. AAPL, has already received $1.5 billion of its promised $6.6 billion in CHIPS Act funding.
“We have to bring production back to our country,” Trump said. “It’s time for the United States to return to the system that made us richer and more powerful than ever before,” comparing his approach to tariffs implemented by former President William McKinley in the 1890s.
The announcement comes as TSM progresses with its $65 billion investment in three Arizona facilities. The company’s first fab began production in late 2024, with a second facility planned for 2028. While CFO Wendell Huang expressed confidence in continued U.S. government support, Trump’s proposed tariffs could significantly impact the semiconductor supply chain.
Why It Matters: Other Taiwan-based manufacturers with significant U.S. presence include Hon Hai Precision Industry Co. also known as Foxconn, a key supplier for Apple, and ASE Technology Holding Co. ASX, which provides semiconductor packaging services to multiple U.S. tech companies.
The geopolitical implications extend beyond trade. Former National Security Adviser John Bolton warned in October about Taiwan’s vulnerability under Trump’s presidency, citing Trump’s skepticism about U.S. defense commitments to the island nation.
Market analysts at UBS note that TSM controls over 90% of advanced chip manufacturing globally. Mizuho Securities suggests that Trump’s proposed policies could pressure U.S. tech companies to accelerate domestic production alternatives, potentially benefiting American chipmakers like Intel Corp. INTC and Micron Technology Inc. MU.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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