Taiwan's Chip Industry Could Face Short-Term Weakness After Trump's Tariffs -- Market Talk
0458 GMT - Taiwan's semiconductor industry could face further short-term weakness after Trump's 'Liberation Day' tariff announcements. This comes in addition to recently heightened uncertainty regarding long-term demand for AI, Morningstar analyst Kai Wang says in a research note. Chips are likely subject to 10% tariffs, given they are exempt from the reciprocal tariffs, he says. TSMC, with 70% of its sales coming from U.S. customers, could ship its chips to Malaysia or wherever the tariffs are the lowest, the analyst notes. "Its strong pricing power means it could push customers to bear most (if not all) of the tariffs," he adds. However, Wang cautions that the worst-case scenario is tariffs leading to higher inflation and hurting demand everywhere, from smart home appliances, data centers to EVs, which would weigh on chip demand. (sherry.qin@wsj.com)
(END) Dow Jones Newswires
April 03, 2025 00:58 ET (04:58 GMT)
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