us chip boom at risk? trump's policies cast shadow over semiconductor dreams

2025-05-16 general

Los Angeles, Friday, 16 May 2025.
The us semiconductor industry is facing uncertainty. A potential manufacturing boom, fueled by government incentives and major investments, may be jeopardized. The possible return of trump’s ‘america first’ economic policies is creating headwinds. Samsung’s texas facility opening is delayed to 2028. This delay is due to funding concerns and trade policy uncertainty. The us share of global chip production plummeted from 37% in 1990 to a mere 10% in 2022.

chips act and market impact

The CHIPS Act of 2022 aimed to revitalize domestic semiconductor manufacturing [1]. A May 2024 report projected a tripling of us semiconductor manufacturing capacity because of this act [1]. Despite these efforts, potential policy shifts are causing concern. Barry Broome, from the great sacramento economic council, noted the risks of long-term tariffs, suggesting they could ‘ice the capital markets’ [1]. This uncertainty may deter investment in the sector, impacting stock valuations for companies like intel and amd [2].

tariffs and trade tensions

Trade tensions and tariffs add complexity. Alvin Nguyen, a senior analyst at forrester, anticipates potential supply chain disruptions due to the difficulty in tracking the origin of materials and finished goods [1]. These disruptions could affect production costs and market dynamics. Tariffs on chinese semiconductors are already high. Tariffs have reached approximately 70% [3]. These tariffs, combined with export controls, could further strain the semiconductor industry and impact companies relying on global supply chains [3].

labor shortages and skilled workforce

The us manufacturing sector is grappling with a skilled labor shortage. A mckinsey report estimates a need for 300000 additional engineers by 2030 [5]. Tsmc, intel, and samsung face delays due to a lack of trained engineers and technicians [5]. Javier Palomarez, from the united states hispanic business council, emphasized the need for access to qualified workers to protect national security and succeed in semiconductor production [5]. Addressing this shortage is crucial for sustaining growth and investor confidence.

us-china relations and ai restrictions

The us department of commerce’s bureau of industry and security (bis) has taken steps to strengthen export controls on ai chips [4]. These measures include guidelines on using huawei’s ascend chips and warnings about using us ai chips for training chinese ai models [4]. These restrictions aim to maintain us leadership in ai innovation [4]. However, such regulations could hinder the development of the global semiconductor supply chain and potentially impact the stock performance of companies involved in ai chip manufacturing [4].

global competition and investment

The united arab emirates (uae) is emerging as a secure hub for ai compute infrastructure. The uae has access to us semiconductor technology and $100 billion in ai infrastructure funds [7]. Nvidia’s stock has surged 140% since 2022, partly due to partnerships in the uae [7]. The uae’s ai infrastructure partnership with blackrock and mgx guarantees over $100 billion in capital flows through 2030 [7]. This global competition highlights the need for the us to address policy uncertainties to maintain its competitive edge in the semiconductor industry.

Bronnen

semiconductor manufacturing economic policy