President Donald Trump said on August 5, 2025, that his administration plans to announce new tariffs on semiconductors and chips as early as next week.

Details about the scope and scale of the tariffs have not been disclosed.

Potential tariffs could impact US hardware and AI companies that rely on semiconductor imports.

Since the CHIPs Act was signed in 2022, providing US$52 billion in subsidies, companies like Intel and Taiwan Semiconductor Manufacturing Company (TSMC) have received funding to boost domestic chip manufacturing.

TSMC has committed to investing in new US chip plants over the next four years, but building such facilities takes time.

Intel recently made an announcement regarding its Ohio chip factory, highlighting ongoing production challenges, though the details remain unclear.

The announcement comes as the industry awaits updates on US rules restricting AI chip exports, with the Trump administration reportedly considering changes to existing export controls established under President Biden.

🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ Tariffs face a massive manufacturing reality gap that will take years to close

The proposed semiconductor tariffs highlight a stark mismatch between where American chip companies are based and where their products are actually made.

Despite more than half of global semiconductor companies being headquartered in the U.S., America produces only 8% of the world’s chips today, down from 100% when the industry began 1.

Even with the CHIPS Act’s $52 billion investment, the U.S. is projected to reach just 28% of global advanced logic manufacturing by 2032, starting from 0% in 2022 2.

This means tariffs could immediately impact costs for American companies while domestic alternatives remain years away from meaningful production.

The timeline challenge is real. Building advanced semiconductor plants now costs $20-30 billion each and takes multiple years to complete 1.

Intel’s recent delays on its Ohio facility, mentioned in the original article, exemplify how even well-funded domestic projects face extended development periods that can’t quickly offset tariff impacts.