nvidia and tsmc brace for impact as trade barriers rise

2025-05-05 general

Hsinchu, Monday, 5 May 2025.
tsmc founder morris chang declares globalization and free trade dead. nvidia and tsmc now face significant headwinds. rising trade barriers and geopolitical tensions complicate the ai market landscape. a key concern is the potential impact of us semiconductor tariffs, set to dominate discussions at computex. nvidia could face $5.5 billion in related expenses. these tariffs could reshape market access, reduce profitability, and threaten global competitiveness for both tech giants.

tariff implications for taiwan

The evolving trade landscape has spurred discussions between Taiwan and the U.S. regarding tariffs [3][4]. A Taiwanese delegation met with U.S. officials to address tariffs, non-tariff barriers, and broader trade issues [3]. These discussions follow initial talks held via videoconference in April [3]. The U.S. had earlier announced potential tariffs on goods from Taiwan, including a 32% import duty, but subsequently paused these measures for negotiation [3][4]. Taiwan’s President Lai Ching-te aims to negotiate a ‘zero tariff’ arrangement, drawing inspiration from the United States-Mexico-Canada Agreement [3].

tsmc’s strategic response

In response to tariff uncertainties, TSMC is accelerating its investments in the U.S., with its Arizona plant serving as a key component [1]. Total investment in the U.S. is projected to reach $165 billion, supporting the construction of six wafer factories, two advanced packaging facilities, and a research and development center [1]. This expansion aims to mitigate risks associated with tariffs and ensure a more resilient supply chain [7]. AMD also plans to produce key processor chips at TSMC’s Arizona facility, marking the first time AMD products will be manufactured in the U.S [7].

broader economic effects

President Trump’s administration has implemented a series of tariffs impacting nearly all U.S. imports [2]. The average effective U.S. tariff rate rose from 2.5% to an estimated 27% between January and April 2025 [2]. Tariffs on goods from China have escalated significantly, with baseline tariffs rising to 145% [2]. These measures have prompted concerns about increased costs for products containing semiconductors, potentially reducing demand for TSMC’s services and adversely affecting its business and future growth [1].

expert opinions and market outlook

Industry experts anticipate that U.S. semiconductor tariffs will be a prominent topic at the upcoming computex [1]. Broader impacts of rising tariffs include potential price surges, with a Reuters/Ipsos poll indicating that 73% of Americans expect prices to increase [2]. The head of FX at Deutsche Bank noted a simultaneous collapse in the price of U.S. assets, including equities and the dollar, signaling significant market disruption [2]. Deputy Legislative Speaker Johnny Chiang has voiced concerns about trade uncertainty and potential losses for Taiwanese industries [4].

Bronnen

tsmc trade barriers