Asia semiconductor-related stocks traded mixed Thursday after U.S. President Donald Trump announced he would impose a 100% tariff on chip imports, with an exemption for companies that are “building in the United States.”
Details on how much domestic manufacturing is required to qualify for the exemption remain unclear.
Japanese semiconductor manufacturer Tokyo Electron fell over 5% before paring losses to trade 2.9% lower as of 11.20 a.m. Japan time (10.20 p.m. ET Wednesday), data from LSEG showed. Other Japanese chip stocks mirrored the fall. Renesas Electronics declined 4% at the open while Advantest slid 3.3%.
However, South Korean chip majors Samsung and SK Hynix appeared to be exempted from the 100% tariffs, the country’s top trade envoy Yeo Han-koo was reported as saying on the radio. Memory chipmaker SK Hynix rebounded after falling by more than 3% in initial trade.
Shares of Samsung Electronics bucked the trend, climbing 2.47%. Apple announced Wednesday that it will use chips produced by Samsung Electronics at the latter’s Texas facility for its devices, including iPhones.
Taiwan Semiconductor Manufacturing Company — the world’s biggest chip supplier — also started the trading session in the green, rising by over 4%.
TSMC has announced significant investments in the U.S recently, including an initial $65 billion to build three plants in Arizona, and an additional $100 billion U.S. investment in March.
“We’re going to be putting a very large tariff on chips and semiconductors,” Trump said in the Oval Office on Wednesday, adding that companies like Apple that are building or committed to building in the U.S. won’t be charged.
“So in other words, we’ll be putting a tariff of approximately 100% on chips and semiconductors. But if you’re building in the United States of America, there’s no charge.”
Ernie Tedeschi, director of economics at the Budget Lab at Yale, noted that “the devil is in the details” as there is no clear framework yet on how exactly the chip tariffs are going to work.
While Japanese semiconductor process equipment markets may wobble at the start given the headline shock of “100% tariffs,” the move could be positive for the industry given the number of Japanese chipmaking equipment that are indispensable for most chipmakers looking to ramp up U.S. production, said Andrew Jackson, head of Japanese equity strategy at ORTUS Advisors.
As of this moment, the big companies are the “clear winners,” said Daniel Newman, CEO of The Futurum Group, citing companies like Apple, Nvidia and TSMC as the ones with the “most dollars to pledge.”
“These are the big wins that President Trump wants to get,” Newman said, adding that the smaller companies that do not have the same scale and leverage will have to negotiate.
Source: CNBC