chip dreams deferred? trump's trade policy threatens us semiconductor boom
washington, Saturday, 17 May 2025.
a potential trump administration’s trade policies are casting a shadow over the us semiconductor manufacturing resurgence. tariffs and subsidy threats are creating uncertainty. samsung’s texas plant is delayed until 2028. nintendo already delayed switch 2 preorders due to tariff concerns. experts warn that these policies could derail the momentum from recent investments and the chips act, jeopardizing america’s competitive edge in ai development.
Investment concerns mount
The potential for increased tariffs and investigations into computer chips and manufacturing equipment imports are causing concern among investors [3]. Alvin Nguyen, a senior analyst at Forrester Research, suggests that tariff uncertainty could disrupt supply chains [3]. This disruption stems from the complexity of tracking materials and finished goods across different production and assembly locations [3]. Such uncertainty could lead to confusion and affect investment decisions in the semiconductor industry [3].
chips act under threat
Analysts are warning that new tariffs, combined with threats to modify the CHIPS and Science Act, could significantly slow down the US’s goal of maintaining a competitive edge in AI development [3]. Mario Morales, an analyst with International Data Corp., stated that Samsung’s Texas fab is now delayed to 2028, a four-year setback [2][3]. He believes companies are delaying investments due to funding uncertainties and new trade policy concerns [2][3].
nintendo’s tariff troubles
The uncertainty surrounding tariffs has already impacted consumer electronics. Nintendo delayed preorders for the Switch 2 in April as retailers assessed the potential impact of tariffs [2][3]. Nintendo later confirmed price adjustments for some Switch 2 accessories [2][3]. While the console’s base price remains at $449.99, the increased accessory costs could deter consumers, potentially affecting Nintendo’s stock performance [2][3].
historical context and future outlook
The US semiconductor industry has been working to bring business back to the country, with investments from both domestic and foreign tech companies [2][3][6]. The CHIPS Act of 2022 aimed to revitalize US semiconductor manufacturing [2][6]. However, the US share of global chip production fell from 37% in 1990 to 10% in 2022, highlighting the need for these efforts [2][6]. A May 2024 report projected that the CHIPS Act would more than triple US semiconductor manufacturing capacity [2].
economic council’s perspective
Barry Broome, president and CEO of the Greater Sacramento Economic Council, believes the Trump administration’s tariffs aim to restructure global relationships [2][3]. He hopes negotiations will conclude quickly, as trade policy uncertainty is detrimental to the markets [2][3]. Broome warns that if tariffs become a long-term policy, capital markets will hesitate to invest [2][3]. This hesitation could significantly impact the semiconductor industry’s growth and stock valuations [2].