Taipei: Taiwan Semiconductor Manufacturing Co. (TSMC) is expected to be prioritized for an exemption from U.S. President Donald Trump's proposed 100 percent tariff on imported semiconductors, as stated by an American researcher. The exemption is anticipated due to TSMC's significant investment in the United States.
According to Focus Taiwan, Derek Scissors, a senior researcher at the American Enterprise Institute, indicated that Trump's semiconductor tariff could encompass a wide array of products. He noted that President Trump might require suppliers to invest in specific products to qualify for a tariff exemption. Scissors expressed confidence that TSMC would likely be at the forefront for such an exemption, particularly for products manufactured within the U.S.
On Wednesday, President Trump announced the imposition of a 100 percent tariff on imported semiconductors, stating that companies producing chips domestically would not face this charge. However, the details remained vague, leaving uncertainty about whether products made abroad by U.S.-based companies would qualify for tariff-free entry.
Following Trump's announcement, investor sentiment boosted TSMC's market performance, with shares rising by 4.89 percent to a record high of NT$1,180.00 in Taipei. Additionally, TSMC's American depositary receipts (ADRs) experienced a 4.86 percent surge.
TSMC is currently investing $65 billion to construct three wafer fabrication plants in Arizona, with the first expected to begin mass production in late 2024 using advanced 4-nanometer technology. In March, TSMC announced plans to increase its U.S. investment to $165 billion over the coming years, including additional wafer fabs, IC assembly plants, and a research and development center.
Scissors highlighted the uncertainty created by Trump's tariff strategy, suggesting it could deter companies from exporting to the U.S. and prompt them to announce investments without necessarily following through.
In April, Trump introduced broad tariffs affecting U.S. trading partners, including a 32 percent levy on Taiwan, which was later reduced to 20 percent effective Thursday. This tariff remains higher than the 15 percent imposed on Japan and South Korea, two of Taiwan's main competitors. Scissors noted that Taiwan's competitiveness depends on the uniqueness of its products, suggesting that a small tariff difference may not significantly impact Taiwanese firms.
Taiwan's government described the 20 percent tariff as "provisional" and plans further negotiations with the U.S. to achieve a reduction to 15 percent. Scissors suggested Taiwan could leverage substantial investment commitments to negotiate a lower rate.