on semi sidesteps chip act influence, prioritizes supply chain resilience
Phoenix, Tuesday, 10 June 2025.
on semiconductor, a major us chip manufacturer, bucks the trend. The company won’t alter factory layouts based on chip act incentives or tariffs. Instead, on semi prioritizes a resilient, diversified supply chain. This decision highlights a focus on long-term stability over short-term government benefits. The ceo stated that factories can’t be moved in a day. This underscores customer needs as paramount. The firm is among the few major players not seeking chip act subsidies.
on semi’s strategic independence
on semiconductor’s (on semi) decision to avoid tailoring its strategy to the us chip act signals a focus on self-reliance [1]. The company’s ceo, hassane el-khoury, emphasized that subsidies should not dictate factory locations [1]. Building a factory solely for subsidies could lead to poor long-term decisions if those subsidies disappear [1]. This independent approach may appeal to investors who value companies that prioritize sustainable strategies over short-term gains tied to government incentives [GPT].
tariff impact and supply chain diversification
The us-china trade environment remains uncertain, with potential tariff increases impacting the semiconductor industry [3]. Former president trump has proposed tariffs as high as 50% on semiconductor imports and 60% on chinese goods [3]. on semi’s emphasis on supply chain resilience and diversification aligns with the need to mitigate risks associated with these tariffs [1][3]. Companies are already shifting assembly and testing operations to southeast asia to avoid tariffs [3]. A proactive diversification strategy could provide on semi with a competitive advantage.
korean concerns over critical minerals
While on semi navigates the chip act, other nations are voicing concerns about us trade policies. The south korean government has urged the us to avoid imposing tariffs on korean-produced critical minerals [2]. These tariffs could negatively impact korean companies operating in the us and harm american interests [2]. Korean battery firms have invested heavily in the us supply chain but still rely on imported raw materials [2]. This situation highlights the complex web of international dependencies in the semiconductor and related industries.
taiwan semiconductor manufacturing corporation’s (tsmc) revenue surge
While some companies express caution, others are experiencing growth. Taiwan semiconductor manufacturing corporation (tsmc) saw its may sales surge by 39.6% [9]. This increase is attributed to companies stockpiling chips amid rising trade uncertainties and strong artificial intelligence (ai) demand [9]. This surge suggests that despite trade tensions, demand for semiconductors remains robust [GPT]. Investors will likely monitor whether on semi can capitalize on similar market dynamics through its diversified approach.