[News] Trump Reportedly Eyes Broad Chip Tariffs on End Products; Consumer Demand Could Face Further Pressure

The Trump administration is reportedly weighing a broader semiconductor tariff strategy aimed at boosting domestic chip production. According to POLITICO, sources say one approach under consideration could extend tariffs beyond chips to products containing semiconductors, potentially including laptops, gaming consoles, and data center servers.

As the report notes, Commerce officials are increasingly pushing for broader tariffs to encourage chipmakers to expand U.S. production. Commerce Secretary Howard Lutnick reportedly favors tying tariff relief to domestic manufacturing commitments. Under the proposed system, companies could import a certain volume of chips duty-free, with the allowance based on how much production they pledge to bring to the U.S.

Key details remain unsettled. The administration is reportedly considering a phase-in period, while tariff rates and other terms have yet to be determined. According to POLITICO, one proposal would establish separate tariff rates and import quotas for individual countries, along with country-specific guidance covering major semiconductor manufacturers.

The proposed approach could leave U.S. companies without enough tariff-free chips to meet rising demand. As POLITICO notes, broader tariffs could slow data center expansion by making it more difficult and expensive for U.S. companies to secure the volume of semiconductors needed to support the AI boom.

Chip Exemptions May Not Shield the Broader Supply Chain

As noted by UDN News, chips manufactured by TSMC in the U.S. are already tariff-exempt. However, many chips are shipped to assembly plants in Asia, including China and Southeast Asia, where they are incorporated into laptops, servers, and gaming consoles before being exported to the U.S. While the chips themselves are exempt, tariffs on these finished products could weaken demand and indirectly affect upstream semiconductor manufacturers, the report notes.

The impact could vary by product. AI servers may see relatively limited effects, as their high value has already prompted manufacturers to expand U.S. production. PCs could face greater pressure, however, with average prices already up more than 20% in the first half of the year due to rising memory and other component costs. Additional U.S. tariffs on laptops would likely be passed on to consumers, further weighing on demand, UDN News adds.

Tight Memory Supply Could Shift Pressure to U.S. Buyers

For South Korean memory makers, the near-term impact could also be limited. Chosun Ilbo notes that global supplies of DRAM, NAND flash, and HBM remain severely constrained, while significant new supply is not expected until 2028 despite capacity expansions by Samsung Electronics, SK hynix, and Micron. With memory prices already surging and supply remaining tight, tariffs could instead put more pressure on U.S. Big Tech companies that require large volumes of memory to build AI data centers, the report adds.

Hankyung adds that SK hynix held a groundbreaking ceremony for its semiconductor packaging plant in West Lafayette, Indiana, on August 27. Unlike Samsung Electronics, SK hynix has yet to make a major U.S. investment in front-end chip production, raising the possibility of further investment. However, the report notes that expanding now could expose the company to oversupply risks if the semiconductor cycle turns down.

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(Photo credit: The White House)