The US now has semiconductors and pharmaceuticals firmly in its tariff sights.
Writing on his Truth Social account, President Donald Trump said nobody is “getting off the hook for the unfair trade balances.” He said the administration was taking a look at semiconductors and the whole electronics supply chain for its next round of tariff investigations.
Speaking on TV network ABC News, Commerce Secretary Howard Lutnick, said, “Virtually all semiconductors are made in Taiwan, and finished in China, and it’s important we reshore them … [T]hey will be outside the reciprocal tariffs.” Negotiations are likely to factor in other factors; Taiwan is considering tripling US LNG imports to avoid tariffs, for example.
The US will have to tread carefully, however, given key Asian suppliers are already busy investing in US semiconductor fabs.
Last month leading supplier TSMC announced plans to expand its investment in advanced semiconductor manufacturing in the US by an additional $100bn, building on the company’s ongoing $65bn investment in its semiconductor manufacturing operations in Phoenix. This would support up to 40,000 construction jobs and tens of thousands in chip manufacturing and research and development.
Semiconductors revenue growth is strong, driven by continued progress in technology – especially AI – in automotive and mobile, spurring fab facility growth, and supported by policy initiatives such as the Biden administration’s 2022 CHIPs and Science Act.
US think tank Atlantic Council has warned that the $52bn allocated from the CHIPS Act will not be enough to enable the US to catch up. “The US semiconductor industry has vast engineering needs that American university programs cannot meet, and much of the semiconductor supply chain will remain in Asia,” it states.
In a worst-case scenario in which US semiconductor sales to China fall to zero, the American Chamber of Commerce estimates that US companies would face a loss of $83bn annually, with inflationary costs and supply chain disruption passed onto US consumers in higher prices.
TechCET, the electronic materials advisory firm, is anticipating growth of near 8% for the global semiconductor chip manufacturing materials market in 2025.
Specialty gases are integral to semiconductor and pharmaceutical industries. They are used in various processes such as deposition, etching, doping and cleaning, as well as analytical testing, process control and drug development.
