Taipei: A proposed 100 percent tariff on chip imports announced by U.S. President Donald Trump could shift more of Taiwan’s semiconductor production overseas, an expert said Thursday.

According to Focus Taiwan, Liu Pei-chen, a researcher at the Taiwan Institute of Economic Research’s (TIER) Taiwan Industry Economics Database, stated in a telephone interview with CNA that Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the U.S. This shift is expected to lead to higher supply chain costs, ultimately raising prices of consumer electronics and creating uncertainty in future market demand.

Liu highlighted that Trump’s move signals his intention to “restore the glory of the U.S. semiconductor industry.” Previously, Trump used a “carrot” strategy, offering incentives such as raising investment tax credits for chipmakers to 35 percent to encourage semiconductor manufacturing investments. Now, he is deploying the “stick” by imposing punitive tariffs unless companies invest in the U.S.

Despite this, Trump has indicated that there would be “no charge” for firms “building in the United States of America.” Liu noted that the planned tariffs will have a limited impact on Taiwan Semiconductor Manufacturing Co. (TSMC), which currently has facilities in Arizona and pledged to invest an additional US$100 billion in the U.S. in March to expand its semiconductor manufacturing operations.

This dual approach could pressure global chipmakers to accelerate their U.S. investments, inevitably raising costs across the semiconductor supply chain and driving up prices of end-user electronics. This could introduce further uncertainty to the semiconductor market, Liu explained.

Liu pointed out that as the U.S. is the largest global market for AI and high-performance computing applications, such broad tariffs could influence where semiconductor companies choose to deploy advanced process facilities to avoid high U.S. tariffs. However, as the U.S. supply chain remains incomplete, particularly in terms of imported semiconductor equipment and materials, the cost of building fabs in the country could potentially increase.

She emphasized that the competitive landscape in the foundry industry remains unchanged because major companies like TSMC, Intel, and Samsung, all investing in U.S. facilities, would be exempt from the tariff. However, the tariff policy could prompt more TSMC suppliers and related firms to set up operations in the U.S., possibly leading to a decline in Taiwan-based semiconductor production and potentially affecting employment, wages, and local investment in Taiwan, a trend worth monitoring.