Impact of President Trump’s Tariffs on Chip Stocks: Nvidia, TSMC, and More
President Trump’s announcement of sweeping reciprocal tariffs affecting the semiconductor supply chain sent shockwaves through the stock market on Wednesday, with chip stocks taking a hit in after-hours trading. Nvidia (NVDA), TSMC (TSM), and other major players in the industry saw significant drops in their stock prices.
Nvidia stock dropped 4.7%, while rival Advanced Micro Devices (AMD) dipped 4.5%. Broadcom (AVGO) fell 5.2%, and Micron (MU), a key supplier of memory chips for Nvidia’s GPUs, sank 6.4%. TSMC, the Taiwanese contract chip manufacturer that produces advanced semiconductors for Nvidia and Apple (AAPL), saw a 4.8% decline in its stock price.
President Trump’s announcement included reciprocal tariffs of 34% and 32% on imports from China and Taiwan, respectively. These tariffs could make purchases of servers using Nvidia’s GPUs more expensive, potentially impacting demand for the AI chips. Taiwan exported roughly $33 billion worth of computer parts, including Nvidia’s GPUs, to the US in 2024, while China exported over $16 billion worth of computer parts to the US.
Trump’s comments highlighted the importance of domestic chip manufacturing, with TSMC being a key player in producing advanced computer chips for American companies. TSMC recently announced a $100 billion investment in expanding its domestic chip manufacturing footprint in Arizona. The move towards domestic production has been supported by funding from the US Chips and Science Act.
While it remains unclear how tariffs will impact the semiconductor industry in the long run, Trump’s message to companies was clear: if you want to avoid tariffs, build your products in America. The future of the semiconductor supply chain and the impact of these tariffs on the industry remain uncertain, but the news has certainly sent ripples through the market.
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