Tariffs on chip gear could spike US fab costs: TSMC reportedly to spend $6bn or more

Trump may have hit the brakes on tariffs for 90 days, but concerns still linger. If they go into effect later, chipmakers like Intel and TSMC could face 20% higher costs for ASML gear if they plan to use it in U.S. fabs, according to BITS & CHIPS.

The BITS & CHIPS report highlights that while many semiconductors dodged the 20% EU tariff announced by Trump last week, chipmaking equipment didn’t make the exemption list, which could lead to rising costs for semiconductor giants expanding in the U.S.

Analysts cited by Commercial Times estimate that out of TSMC’s $100 billion U.S. investment announced in March, around $65 billion will likely go to chipmaking equipment. With EU and Japan tariffs potentially at 20-24%, TSMC may need to spend at least $6 billion more just to maintain current production capacity.

As Reuters points out, ASML’s High NA EUV machines can cost up to $350 million each. With Trump’s potential 20% EU tariff, TSMC may face tens of millions in extra costs per machine for its $100 billion U.S. investment, the report suggests.

Rising costs for chip tools and specialty chemicals
Commercial Times notes that everything from overseas equipment to raw materials could likely come with higher price tags in the U.S. While U.S. firms like Applied Materials and KLA play key roles in TSMC’s manufacturing process, many of the foundry giant’s chipmaking tools come from Japan and the Netherlands.

In addition to the rising costs for chipmaking equipment, operating costs could rise for TSMC’s U.S. fabs too, as specialty chemicals like photoresists and electronic-grade sulfuric acid still rely heavily on Japanese suppliers, the report notes.

While TSMC can offset some costs due to its technological advantage, the real risk is consumer pushback. If prices rise—especially for major clients like Apple—it could hurt demand. How TSMC navigates this challenge remains to be seen.

For now, Trump authorizes a 10% reciprocal tariff for most countries, excluding China, while negotiations are ongoing. However, he also warned more levies are coming—and that chip tariffs could hit 25% or more.

Intel: Already got high-NA EUVs machines installed
On the other hand, Intel may face less pressure on chipmaking equipment costs since they already have some of the most expensive machines in place. Team Blue revealed in February that the first two High-NA EUV machines from ASML are in production, as per Reuters.

Intel is reportedly using its 18A manufacturing technology, set for mass production with a next-gen PC chip later this year, to test high-NA tools, the report adds.