Chinese semiconductor traders have reportedly halted price quotes for their clients in anticipation of shipment disruptions caused by the ongoing tariff conflict.

Sellers in Shenzhen’s Huaqiangbei, a major electronics market, have stopped quoting prices for products such as CPUs and graphic cards, as reported by the Chinese news outlet Jiemian.

From January to March 2025, China imported 131.25 billion integrated circuit (IC) units valued at US$88.3 billion.

During the same period, exports totaled 76.13 billion IC units valued at US$40.9 billion, reflecting a 22% increase in volume and a 10.8% rise in value year on year.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Semiconductor supply chains reveal paradoxical interdependence despite tariffs

The US-China semiconductor dispute exposes a complex reality where trade barriers highlight rather than reduce interdependence.

US semiconductor manufacturers face a unique challenge where they pay tariffs on their own components that were initially produced domestically but sent to China for assembly and packaging 1.

This production pattern creates a situation where tariffs meant to protect domestic industries can actually harm them, as many semiconductor-related products face a potential 40% blended tariff rate despite nominal exemptions for the chips themselves 2.

The result is a “tariff boomerang” effect where protectionist measures ricochet back through global supply chains to impact their originators, illustrating why semiconductor industry veterans predict “a lot of pain” before any normalization occurs 3.

Despite attempts to decouple, the highly specialized and interconnected nature of semiconductor production makes rapid supply chain reorganization extremely difficult, forcing companies to absorb costs or pass them to consumers rather than quickly relocate manufacturing.

2️⃣ The asymmetric impact of semiconductor sanctions favors China

Industry experts believe the US may suffer more than China in this trade conflict due to China’s position as a consumer of approximately 40-50% of global semiconductor supply 3.

China has strategically targeted America’s vulnerabilities by restricting exports of critical minerals like gallium (94% of global supply) and germanium (60% of global supply) that are essential for chip manufacturing, creating significant challenges for non-Chinese producers 4.

This reflects China’s increasing confidence in leveraging its position in the supply chain, forcing countries like Japan and South Korea to scramble for alternative sources of these vital materials amid rising prices 4.