In a move that’s sending shockwaves across Asia’s semiconductor industry, former US President Donald Trump has unveiled a dramatic 100% tariff on chips made by foreign firms that don’t invest in the United States. The announcement, made from the White House, is part of a larger trade crackdown expected to target goods from numerous countries — and it’s got chipmakers and governments scrambling.
“Chips and semiconductors will be taxed at around 100%, unless you’re building them in the United States. If you’re building them here, there’s no charge,” Trump declared. However, he offered no timeline on when this tariff would actually come into effect — a detail that’s keeping industry leaders on edge.
The heart of the issue? The global race for dominance in artificial intelligence. Semiconductors power AI systems, and whoever controls the chip market, controls a huge part of the future economy. The US, with this bold move, is clearly making its intentions known: bring production home or pay a steep price.
Asian Reaction: Hope, Uncertainty, and Defiance
Across Asia, the ripple effect was immediate.
In Taiwan, shares in TSMC — the world’s biggest chip manufacturer — jumped almost 5%. Why? The government clarified that TSMC wouldn’t be affected, likely due to its significant investment in US manufacturing.
That’s not the case for all. Experts warn that smaller players and producers of low-end chips — including many in Malaysia and China — could suffer. Alicia Garcia-Herrero, a leading Asia-Pacific economist, stated bluntly: “This kills producers of low-end chips.”
For Malaysia, a key player in global semiconductor supply chains, the stakes are high. Trade Minister Datuk Seri Tengku Zafrul Abdul Aziz addressed the issue in Parliament today, saying, “We will continue to fight for Malaysia. We want to ensure that policy changes or exemptions are properly communicated, and that Malaysia remains a strategic partner in the global semiconductor ecosystem.”
He added that Malaysia is already seeking clarification from the US and will not stand by passively as policies change.
The Bigger Picture: A Power Struggle Over Technology
This tariff is more than just a tax — it’s a signal. One that places pressure on chipmakers to put roots in the US or risk losing the American market. It’s also a move that may inadvertently benefit Chinese manufacturers, warned Chiang Min-yen, an expert in emerging technologies.
“If US policies hurt smaller legacy producers, Chinese competitors could swoop in and dominate globally,” he said. “This could backfire, compromising both American industrial policy and national security.”
As the dust settles, countries like Malaysia aren’t backing down. Their message is clear: they’ll fight for their place in the global tech race — with resilience and determination.
