President Donald Trump has stated that he plans to impose tariffs as high as 100% on semiconductors made outside the U.S.

Trump previewed the plan Monday afternoon during a GOP event in his Doral, Florida, golf resort. He indicated that the new tariffs could also apply to certain other products including pharmaceuticals.

Many U.S. chipmakers have a fabless business model, which means they design processors but don’t manufacture them. When it comes to the most advanced processors, manufacturing is usually entrusted to Taiwan Semiconductor Co. Ltd., the world’s largest contract chipmaker. TSMC counts Nvidia Corp., Advanced Micro Devices Inc., Qualcomm Inc. and numerous other fabless chipmakers among its customers. 

“They left us and they went to Taiwan, which is about 98% of the chip business by the way, and we want them to come back,” Trump said. “The incentive is gonna be they’re not gonna wanna pay a 25, 50 or even a 100% tax.” He added that the tariffs will be rolled out “in the very near future.”

Chipmakers can avoid the tariffs if they produce semiconductors in the U.S., Trump stated. He also criticized the CHIPS Act, a piece of legislation designed to boost domestic chip production that former President Joe Biden signed into law in August 2022.

In August 2024, the U.S. Commerce Department revealed that semiconductor makers have inked more than $30 billion worth of CHIPS Act investments. TSMC is among the participating companies. It’s currently building a chip manufacturing complex in Arizona that is set to include three fabs, including one capable of making two-nanometer processors.

Most of TSMC’s production capacity is currently in Taiwan. Its local manufacturing business includes six fabs that make cutting-edge processors from 12-inch silicon wafers. TSMC also has several facilities that work with eight-inch and four-inch wafers, which are typically used to make legacy-node chips.

It’s unclear if the tariffs that Trump previewed on Monday might also apply to semiconductors made in locations other than Taiwan.

Samsung Electronics Co. Ltd. is the world’s largest maker of both DRAM and flash memory chips. The company produces a sizable percentage of its memory chips in South Korea. SK Hynix Inc., another South Korean fab operator, is likewise a major supplier of DRAM and flash modules.

Samsung makes not only memory chips but also processors. Last April, the company received $6.4 billion in federal funding under the CHIPS Act to grow its stateside manufacturing capacity. Samsung is building two fabs in Taylor, Texas that will make processors based on two- and four-nanometer technologies. It also will construct a chip packaging plant nearby along with a research hub.

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