Feb 5 - Growing tariff fears have reportedly pushed Taiwan Semiconductor Manufacturing Company (TSM, Financial) to plan a 15% rise in prices of advanced process chips. On Jan. 27, U.S. President Donald Trump proposed imposing tariffs of up to 100% on semiconductors and pharmaceuticals, which means this is a likely price increase, as per industry sources cited by Commercial Times.
So, these tariffs could have a huge impact on TSMC's Arizona plant, which already cannot be profitable anyway. Without U.S. government subsidies, the plant's estimated profit margins are likely to tumble to 70% of those in Taiwan. Such a decline in profitability would negatively affect the company's overall gross margins.
Chillers throughout the semiconductor supply chain have gotten worried as tariffs have been discussed. New U.S. chip export restrictions are being drafted, sources added, making operations even more difficult. Advanced process chips intended to go on to below 14 and 16-nanometer process nodes destined for China must already be doing so under export licenses because of national security concerns. These chips are critical for high-performance technologies like artificial intelligence, radar systems, and advanced weaponry.
If implemented, these measures could compel TSMC and other companies to reconsider their global operations and supply chain, which may be triggered by gradually escalating geopolitical concerns.
This article first appeared on GuruFocus.免責聲明：投資有風險，本文並非投資建議，以上內容不應被視為任何金融產品的購買或出售要約、建議或邀請，作者或其他用戶的任何相關討論、評論或帖子也不應被視為此類內容。本文僅供一般參考，不考慮您的個人投資目標、財務狀況或需求。TTM對信息的準確性和完整性不承擔任何責任或保證，投資者應自行研究並在投資前尋求專業建議。