While the Trump administration maintains the threat of new semiconductor tariffs under Section 232, Taiwanese authorities have downplayed the potential impact on TSMC, the world’s largest chip manufacturer. According to Taiwan’s National Development Council (NDC), these measures would have a minimal effect, as only 1% of TSMC’s direct sales are made with U.S. entities.
Although the U.S. is one of the main destinations for TSMC-produced chips, most transactions are not direct. The majority of TSMC’s output is sent to design companies like Apple, NVIDIA, AMD, and Qualcomm, which later assemble their products in third countries before exporting to the North American market.
According to a report cited by Nikkei Asia, only 1% of TSMC’s total production is billed directly to U.S.-based clients. This significantly reduces the potential impact of tariffs on its global balance sheet.
Another factor working in favor of TSMC is its strategic investment in American soil. The company is building fabs in Arizona, a move that not only diversifies its manufacturing capacity but also positions it well to request exemptions or tariff reductions.
Trump’s policies, which urge tech companies to manufacture in the U.S., seem to have been effective: TSMC, UMC, Foxconn, Quanta, and Wistron have already announced manufacturing plans or projects in America.
According to the NDC, 75% of Taiwanese exports will not be affected by the tariff measures. The most impacted sectors are steel and aluminum, which are more sensitive to U.S. industrial policies.
In the case of semiconductors, the impact on TSMC would be marginal compared to other industries, though uncertainty remains regarding how Washington’s policies will evolve.
Meanwhile, competition continues to heat up. Rapidus, a Japanese government-backed consortium, is advancing in building a plant for 2 nm chips in 2027, directly competing with TSMC and Samsung Foundry.
Japan’s effort reflects the growing trend among technological powers to ensure local semiconductor production, in a scenario where supply security has become a geopolitical issue.
Amid the volatility of U.S. tariff policies, TSMC appears better positioned than others to mitigate the impact. Its low direct exposure to the U.S. market, combined with investments in local fabs, reinforces the view that tariffs will not threaten its global leadership in the chip industry.
However, analysts warn that rules can change swiftly. In a context marked by geopolitical and technological competition, Taiwan, the U.S., Japan, and South Korea will continue to play parallel games to control the future of silicon.
Frequently Asked Questions (FAQ)
Why won’t TSMC be heavily affected by U.S. tariffs?
Because only 1% of its direct sales are made with U.S. entities. Most of its chips reach the U.S. through third countries and international clients.
What role do TSMC’s Arizona factories play?
They are a strategic bet that not only diversifies production but also opens the door to tariff exemptions and aligns more closely with U.S. industrial policies.
Which Taiwanese industries will be most affected by tariffs?
The steel and aluminum sectors are the most exposed, while semiconductors, led by TSMC, will face minimal impact.
How does international competition influence this landscape?
The race for 2 nm nodes and beyond involves TSMC, Samsung, and Rapidus, marked by technological innovation and geopolitical strategies to secure local chip production.