Former President Donald Trump reiterated his frustration with Taiwan over the weekend on the Joe Rogan Experience podcast and accused the island of stealing the U.S. chip industry.
Trump criticized the U.S. chip bill and said that if elected president, he would impose tariffs on Taiwanese chips. Such tariffs would impact the global leader in chip manufacturing, British Semiconductorwhose clients include companies such as NVIDIA and apple.
TSMC shares closed down 4.3% on Monday.
“You know, Taiwan, they stole our chip business … and they want to protect it,” Trump said during the appearance. The podcast was released on Saturday night.
Every hyperscale provider, e.g. Amazon, Google and Microsoftis working with the Taiwanese company to develop its own in-house chips. UBS analysts estimate that more than 90% of the world’s advanced chips are made by TSMC. Companies such as Intel and Samsung have tried to compete, but have encountered a series of setbacks.
U.S. companies are facing growing pressure to build replacement TSMC factories in the U.S. amid broader geopolitical concerns surrounding Taiwan and the risk of Chinese invasion
As a typical representative of the US chip bill, Intel faces many challenges. “We want to build leading infrastructure in the United States, and honestly from a policy perspective it really shouldn’t matter that much who builds it,” Bernstein analyst Stacy Rasgon told CNBC. ”
Rasgon added that the idea that Taiwan has stolen our chip industry is “ridiculous.”
As part of the CHIPS Act, TSMC is about to receive nearly $7 billion in funding from the U.S. Department of Commerce to build an Arizona foundry. During the company’s earnings call two weeks ago, TSMC Chief Executive CC Wei said progress was being made at its Arizona factory and production was expected to increase significantly in 2025.
The Commerce Department funds have not yet been allocated to TSMC or other major semiconductor companies. Funds are expected to be distributed by the end of the year, provided certain milestones are met, sources said.
Trump also suggested that foreign companies should not enter the United States and use government funds. “This chip deal is terrible,” he said. “We’ve invested billions of dollars to let wealthy companies come in and borrow money to build chip companies here. No matter what, they’re not going to give us good companies.”
Mizuho analysts recently wrote that a Trump victory would be detrimental to TSMC. Analysts at Citi are debating how much tariffs might increase costs across the wafer supply chain. They added that it would be difficult for the government to navigate the tariffs. “(Tariffs) would require a complex review of thousands of devices containing a variety of chips,” Citi analysts wrote.
Given Silicon Valley’s reliance on TSMC chips, the market has been paying close attention to risks surrounding Taiwan. Earlier this summer, when Trump made similar remarks about Taiwan, $675 billion was wiped off the market value of the SMH ETF in a week. TSMC fell more than 10%.
U.S. companies that own or are building wafer fabs, including Intel, GlobalFoundries and Texas Instruments, performed better than expected on expectations that a Trump victory would benefit domestic businesses.
However, the broader trade war could also pose challenges to the industry. Patrick Moorhead, chief executive of Moor Insights & Strategy, said: “It is possible that high tariffs will be imposed on China (during the Trump presidency), and as we have seen before, this will trigger a reaction from China, as we at Micron As seen.
But experts warn that “all is well” for the semi-trade if Vice President Kamala Harris wins the election. Some of the strictest export controls imposed on China by the Biden administration have significantly impacted sales to China by Nvidia and other semiconductor companies. Before export controls, Nvidia’s business in China accounted for more than 25% of total sales. China currently accounts for less than 10% of Nvidia’s revenue.
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