china clarifies semiconductor origin: us chipmakers face new tariff landscape

2025-04-11 general

Beijing, Friday, 11 April 2025.
the china semiconductor industry association issued a notice clarifying rules of origin. the new policy defines the origin of integrated circuits as the location of the wafer fabrication factory. us chipmakers like intel and global foundries may face tariffs up to 125%. companies like nvidia, amd, and apple who source from tsmc in taiwan will be exempt. this could shift global supply chains and impact competitiveness for us firms in the chinese market.

defining semiconductor origin

The China Semiconductor Industry Association (CSIA) released an urgent notice on semiconductor product origin [2][4]. The notice clarifies that the location of the wafer fabrication, or ‘chip flowing,’ will determine the origin of integrated circuits [3][4]. This aligns with the four-digit tax code principle [4][7]. The CSIA suggests that customs declarations for both packaged and unpackaged integrated circuits should specify the location of the wafer fabrication plant as the country of origin [3][4].

tariff implications for us firms

China’s new policy could significantly impact U.S. chipmakers [2]. Companies like Intel, Texas Instruments, and Analog Devices, which operate fabrication plants in the U.S., may face tariffs as high as 125% [2][3]. Conversely, firms such as Nvidia, AMD, and Apple, which primarily source their chips from foundries like TSMC in Taiwan, will be exempt from these tariffs [2][7]. This creates a competitive advantage for non-U.S. based manufacturers in accessing the Chinese market [2].

market reaction and stock performance

The announcement triggered immediate market reactions [6]. A-share semiconductor stocks, especially domestic analog chip stocks, experienced a surge [6]. Companies like Nayuta Microelectronics, Chipanalog Microelectronics, and Sanbon Microelectronics all saw their stock prices hit the upper limit [6]. Meanwhile, U.S. analog chip giants saw their stock prices decline [6]. Texas Instruments’ stock, for example, fell by 7.61%, reaching a new low since 2024 [6].

analyst perspectives and supply chain adjustments

Analysts suggest this policy reflects China’s need to serve its global electronics market [6]. It also serves as a countermeasure against the U.S. semiconductor industry [6]. Experts predict that U.S. chip manufacturing and equipment may shift away from the U.S. [6]. Some electronics companies have already paused quoting prices to assess the impact [3]. Others are expediting order processing [6]. Some companies are considering diversifying their inventories across Southeast Asia, Europe, and China [6].

impact on integrated circuit imports

In 2024, China’s integrated circuit imports reached $385.79 billion, a 10.5 or 10.5% increase [6]. Despite U.S. firms holding a significant market share in China, a smaller portion of products are directly imported from the U.S. due to the globalized semiconductor supply chain [6]. Shenzhen distributors confirm that the new tariffs will only affect a small number of specialized models [6]. The industry anticipates potential disruptions to the global supply chain and possible shortages [6].

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china tariffs semiconductor origin