Taiwan’s chipmakers brace for worst-case scenario as Trump’s tariffs dim 2H25 hopes

Trump shocked the world again with sweeping reciprocal tariffs, set to take effect on April 9 for certain countries. While semiconductors aren’t directly targeted yet, Tanwanese industry insiders told Economic Daily News this could still be a worst-case scenario—dampening end-user demand and potentially derailing hopes for a 2025 market rebound.

The report, citing a source from a Taiwanese IC design firm, notes that chipmakers had anticipated steady growth through at least Q3 and stronger momentum in the second half—but that optimism is now rapidly fading.

China-dependent chipmakers: Less US impact, tough local competition
While Taiwan’s direct IC exports to the US are limited, chipmakers could still feel the heat if their customers ship end products to the USA.

The Economic Daily News highlights that most IC design firms have now stabilized their inventory after the pandemic correction. As per the report, from Q4 2024 to Q1 2025, some even saw strong demand as clients rushed to secure orders ahead of US tariff uncertainties, making the off-season unexpectedly busy. However, with Trump’s new tariffs, concerns are rising that US-related orders could slow down, starting in Q2.

It is worth noting that while chipmakers relying on China are less impacted by the latest US policies, they still face tough local competition, making things far from easy, the report adds.

The report notes that OEMs and brands are still figuring out how to respond, with no clear solution yet. For PC supply chain, the impact stretches beyond chips to components like PCBs, passive parts, and thermal modules, the report suggests.

President Lai proposes zero tariffs, highlighting export focus
Under Trump’s plan, Taiwan, which levies a 64% tariff on US goods, will now face a 32% tariff on its exports to America. As per Focus Taiwan, citing Taiwan’s President Lai Ching-te, while 23.4% of Taiwan’s exports went to the US in 2024, over 75% were sent to other markets. Of those exports to the US, 65.4% were competitive ICT products and electronic components, the report adds.

On Sunday, Taiwan’s President Lai Ching-te proposed zero tariffs as the foundation for talks with the US, promising to eliminate trade barriers, instead of imposing reciprocal measures, and stating that Taiwanese companies would increase their investments in the US, as per Reuters.

-- Source: TrendForce, Taiwan.