The roller coaster year of the semiconductor industry continues to develop another major.
President Donald Trump said at CNBC’s Squawk Box on Tuesday that his administration plans to announce tariffs on semiconductors and chips soon next week. However, details about these tariffs remain unknown.
Such tariffs can cause considerable disruption to US hardware and AI companies. When the US Chips and Science Act was signed in 2022 (providing $52 billion in subsidies to boost domestic chip manufacturing). The US produced only about 10% of global chips. Despite this small manufacturing footprint, more than half of the world’s semiconductor companies are headquartered in the US
Since then, some progress has been made towards strengthening domestic chip manufacturing. Intel and the Taiwan Semiconductor Manufacturing Company (TSMC) are funded by the Chips Act. TSMC is also committed to spending “at least” $100 billion over the next four years on US chip manufacturing plants.
However, setting up a chip manufacturing plant takes time. Intel recently announced that it would delay construction of its Ohio chip manufacturing facility.
The tariff announcement comes as the industry awaits the administration’s decision on AI chip export restrictions. This is a rule that allows you to control which countries can purchase advanced semiconductors used in AI systems.
The Trump administration officially retracted the Biden administration’s chip AI export rules in May. These rules established a country-specific, multi-layered approach to limiting chip exports based on national security concerns. The Trump administration then announced its AI Action Plan in July. This underscored the need for the US to implement export restrictions on chips, but it was light on the details of what it would look like.
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Industry sources are currently debating whether the Trump administration should move forward with plans to withdraw and replace Biden’s AI export rules, according to a report from Semafor.
For more information about the tumultuous year of the semiconductor industry, we have compiled a timeline of market news that has been updated regularly since the beginning of 2025.
