trump's tariffs: semiconductor stocks face risks despite us investments

2025-04-07 general

Taipei, Monday, 7 April 2025.
analyst ming-chi kuo is sounding the alarm on semiconductor stocks. trump’s tariff policies could hit the industry hard. even companies with major us investments might not be spared. this raises concerns for major players like tsmc and nvidia. the warning highlights the precarious position of tech companies. global trade tensions and political decisions are major factors. the semiconductor industry remains vulnerable. the analyst suggests investors should tread carefully.

tariff impact on tech stocks

Ming-Chi Kuo voiced his concerns on X, cautioning investors about the near-term risks facing semiconductor stocks due to potential tariff policies under the trump administration [1]. These policies, designed to bring manufacturing back to the U.S., could significantly impact the semiconductor industry [2]. Kuo’s warning suggests that even companies that have heavily invested in U.S. manufacturing may not be exempt from these tariffs [1]. This creates uncertainty and potential downside for investors in semiconductor companies [3].

market reaction and stock declines

The market has already reacted negatively to the prospect of these tariffs. On april 4, 2025, nvidia shares experienced a 7.36% drop, amd fell by 8.57%, broadcom decreased by 5.01%, and tsmc declined by 6.27% [1]. These declines illustrate the immediate investor concern regarding the potential impact of tariffs on these companies’ profitability and competitiveness [GPT]. Jefferies analysts also warned that the tariffs could increase costs for electronics and tech products, further dampening investor sentiment [1].

apple’s experience as a cautionary tale

Kuo points to apple as a prime example of how even substantial U.S. investments do not guarantee tariff exemptions [1][2]. Despite investing $500 billion in the U.S., apple has not been able to secure leniency from tariffs [1]. This raises concerns that non-U.S. semiconductor companies may face similar challenges, regardless of their efforts to diversify supply chains or invest in U.S. facilities [2]. The analyst questions whether these companies’ efforts to reduce reliance on china or their investments in the u.s. exceed apple’s [2].

potential strategies and challenges

The tariffs could significantly increase the cost of hardware products exported from china, india, and vietnam to the united states [8]. For example, if apple chose not to increase iphone prices, its gross margin could decline by approximately 8.5% to 9% [5]. To mitigate these effects, companies may explore strategies such as negotiating with telecom operators for subsidies, pressuring suppliers to reduce costs, or shifting production to countries with potential tariff exemptions like india and vietnam [5]. However, these strategies may not fully offset the negative impacts [GPT].

industry expert opinions

Analysts are divided on the best course of action. Liu Peizhen, director of the economic and industrial database of the taiwan institute of economic research, believes it would be an ‘unbearable burden’ for tsmc to rescue intel [8]. Qiu Shifang, a senior analyst at the same institute, describes the pressure as ‘very, very high and quite troublesome’ [8]. These opinions highlight the complexities and challenges facing semiconductor companies as they navigate the uncertain tariff landscape [alert! ‘opinions vary’] [GPT].

market capitalization impact

The imposition of tariffs has already had a tangible impact on the market capitalization of major electronics manufacturers. on april 7, 2025, several major electronic manufacturing service companies experienced significant declines [7]. for instance, hon hai’s market capitalization decreased by nearly ntd 208.4 billion, while quanta’s fell by ntd 88.85 billion [7]. overall, major taiwanese electronic service providers saw a combined market capitalization decrease exceeding ntd 378.7 billion [7]. these figures underscore the immediate financial consequences of the tariff announcements.

Bronnen

tariff policy stock risks