What Happened?

Shares of analog chip manufacturer Texas Instruments (NASDAQ:TXN) fell 8.3% in the morning session after China Semiconductor Industry Association issued an emergency directive detailing new methods for verifying the origin of imported chips. According to reports, the location of the wafer fabrication plant would define the origin of imports when tariffs are applied. This meant that companies with manufacturing facilities in the US might be severely affected by the escalating US-China trade tension.

The shares closed the day at $147.60, down 5.7% from previous close.

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What The Market Is Telling Us

Texas Instruments’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 7 days ago when the stock dropped 6.3% on the news that China imposed a 34% tariff on all U.S. imports amid escalating trade war tensions. This was especially rough for the US chipmakers because a big chunk of their business leans on demand out of China. The new tariffs not only threatened to erode profit margins but also risked reducing market share. 

Adding to the uncertainty, the Trump administration signaled the possibility of further regulatory action against the sector. Although semiconductor firms were notably excluded from the broad tariffs unveiled on April 2, 2025, their exclusion raised concerns that targeted restrictions could still be forthcoming.

Texas Instruments is down 21.2% since the beginning of the year, and at $147.23 per share, it is trading 33.2% below its 52-week high of $220.29 from November 2024. Investors who bought $1,000 worth of Texas Instruments’s shares 5 years ago would now be looking at an investment worth $1,367.

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