Semi-conductor as a forefront, is one of the sectors which was hit heavily by tariffs implemented by President Trump. The reciprocal tariffs sparked massive sell-off around global financial markets, Nvidia and Apple led the sell-off as the bellwether of AI and semi-conductor, the market cap of Nvidia wiped out more than $265 billion.
.Trump previously claimed that the "chip tariffs" would be implemented soon. Although approximately $82 billion worth of imported chips from the US are temporarily exempted, key mechanical equipment, electronic products, and automotive terminal imports will be impacted by tariffs of up to 49% ultimately. China's direct import of semiconductor products from the US accounts for less than 4% of the total amount, but huge changes in the trade environment will still have an negative impact on China's semiconductor industry.
According to data, China's imports of semiconductor products from US worth about $16.3 billion in 2024. In terms of the supply chain, upstream and downstream supply chains will be both affected adversely. Taking Apple as an example, 90% of phones are assembled in China, which is in a tough position and backed to a corner in terms of digesting tariff costs or passing them to consumers.
How to break down the impact of tariffs on China's semiconductor sector? Firstly, it is more difficult to acquire equipment and technology. The increase in tariffs will have a significant impact on the semiconductor equipment industry. American companies such as Applied Materials and Lam Research hold approximately 40% of the global semiconductor equipment market share.
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by- ANDREW SMITH
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