Amidst escalating trade tensions and renewed threats of tariffs, a leading analyst suggests that Taiwanese chip giant TSMC might weather President Trump’s latest storm relatively unscathed.
The Analyst View: Taiwan Semiconductor Manufacturing Company (TSMC) will likely not suffer significantly from President Donald Trump’s proposed tariffs on Taiwanese semiconductors, analyst Ming-Chi Kuo said on Sunday.
Kuo argues that TSMC’s yearly chip exports to the U.S. account for a smaller fraction of its monthly revenue, meaning the direct impact of tariffs might be limited. Any additional costs could likely be shifted to their customers.
Trump’s public levy threats, Kuo notes, are more about leveraging negotiation efforts to boost the U.S. in advanced-node manufacturing rather than an effort to directly penalize TSMC.
This aligns with Trump’s broader attempts to negotiate under the U.S. CHIPS Act, aiming to amend subsidy conditions to better fit his administration’s strategic goals, as reported by Reuters.
TSMC’s strategic interests lie in maintaining its technological edge and R&D primarily in Taiwan, resisting any disruptive total technology transfer that could harm its shareholder value.
Trump’s ambitions to uplift domestic chip production lead to several negotiation scenarios — from expanding U.S. advanced-node chip manufacturing to potential tech transfers — according to Kuo, who is best known for his accurate predictions around Apple products.
The Bigger Picture: Recent attempts by Trump to tweak CHIPS Act conditions are in line with his intent to fast-track domestic semiconductor capabilities, amidst concerns over foreign expansions by subsidy beneficiaries like Intel and TSMC.
This presents a challenging negotiation landscape, with Trump possibly exploring options such as further investment by TSMC in its Arizona fabs or deeper entanglement with U.S. chip manufacturers.
A fascinating development is the potential partnership between TSMC and Intel’s U.S. fabs.
Both TSMC and Broadcom are in talks over deals that would see Intel break into two, the Wall Street Journal reported — with the Taiwanese companies being primarily interested in Intel’s factories.
TSMC stock last closed 1% higher at $203.9 on Friday in the US. The shares have given a whopping 250% return over five years.