Trump Chip Tariff to Push TSMC Prices Up 15% in 2025

In recent developments, former U.S. President Donald Trump has pledged to impose specific tariffs on industries such as semiconductors, oil, and natural gas. Amid rising chip tariffs and production costs, Taiwan's leading foundry, TSMC, is expected to raise prices for advanced nodes by over 15% in 2025, a significant increase compared to the previously anticipated range of 5%-10%.

The U.S. has been intensifying its restrictions on China’s access to advanced semiconductors. A new move, announced in mid-January, involves stricter export controls targeting companies like TSMC, Intel, GlobalFoundries, and Samsung, with a focus on processors containing 30 billion transistors built on 14nm, 16nm, or more advanced nodes.

Reports indicate that as Trump begins his second term, semiconductor tariffs appear inevitable, with implementation possibly starting as early as February 18th.

As part of this tariff policy, TSMC may be forced to increase prices for processes below 7nm by more than 15% to offset rising costs. Fortunately, as a leading foundry, TSMC holds significant pricing power, enabling them to pass on the increased costs to customers.

Another concern revolves around the distribution of funds under the U.S. CHIPS Act. Howard Lutnick, the U.S. Secretary of Commerce appointed by Trump, is responsible for overseeing the $52 billion semiconductor subsidy program. However, his reluctance to provide unconditional support has raised doubts about how the funds will be allocated to companies like Intel and TSMC.

Without these subsidies, it is reported that TSMC's Arizona plant could operate at only 70% of the profitability of its Taiwan-based facilities, potentially dragging down overall profit margins.