us preps semiconductor tariffs: how will chip demand react?
Washington, Friday, 25 July 2025.
looming tariffs on semiconductors could reshape the global chip market. set to take effect as early as mid-august, these us tariffs could reach as high as 50% on semiconductors from china (including taiwan). barclays bank analysts predict that these tariffs will significantly impact global chip demand from the second half of 2025 into 2026. some analysts believe that companies with significant us based capacity, like texas instruments and intel, may benefit.
tariff details and timeline
The tariffs stem from a section 232 national security trade investigation initiated in april 2025 by the us department of commerce [1]. the investigation focused on semiconductors, semiconductor substrates, bare wafers, and manufacturing equipment components [1]. commerce secretary lutnik stated that the semiconductor study would conclude by the end of july 2025, with implementation following the conclusion of a similar investigation into the pharmaceutical industry [1]. barclays bank anticipates the tariffs will likely take effect in mid-august or september 2025 [1][2].
potential tariff structures
initial market expectations leaned towards a uniform 25% tariff, but barclays analysts suggest a more complex approach is probable [2][3]. one possibility involves a phased implementation, starting with lower rates between 10% and 15% during an initial 6- to 12-month period [1]. these rates could then increase to 25%, with sensitive areas like ai chips potentially facing tariffs as high as 30% to 50% after 12 months [1]. another option is a differentiated tariff structure, where china (including taiwan) faces the highest rates (30%-50%), while rates for countries like japan, south korea, and southeast asia remain between 15%-25% [1].
industry opposition and scope concerns
companies including intel, texas instruments, micron, and qualcomm have voiced opposition to tariffs on semiconductor equipment and materials [1]. taiwan semiconductor manufacturing co. (tsmc) cautioned that such tariffs could increase the cost of building us-based foundries by 25% to 50%, jeopardizing its $165 billion arizona investment [1]. despite this opposition, barclays believes that tariffs on equipment and materials are still likely [1]. this suggests that the us government aims to extend its reach across the entire semiconductor supply chain, even after major foundries like tsmc and samsung complete their us manufacturing facilities [1].
winners and losers
bernstein, a us investment bank, suggests that texas instruments and intel could be among the few beneficiaries of the new tariffs, as they possess over 50% of their production capacity within the united states [1]. conversely, companies heavily reliant on overseas manufacturing, particularly in china and taiwan, may face significant challenges [1]. the tariffs may not be added on top of existing reciprocal tariffs, but only the declared value of the semiconductor component would be subject to the new tariffs [3]. non-semiconductor components would still be subject to existing reciprocal tariffs [3].
broader market impact
the impending tariffs introduce considerable uncertainty into the semiconductor market. barclays analysts warn of a substantial shock to global chip demand from the second half of 2025 through 2026 [1]. this is because the tariffs will likely increase procurement costs [1]. these tariffs are designed to encourage the return of high-end manufacturing to the us [1]. the long-term consequences include potential restructuring of supply chain costs, adjustments to production capacity, and intensified competition in technology development [1].