Trump's 100% Semiconductor Tariffs May Hit Chipmakers in Singapore, Other Southeast Asian Nations

Unlike advanced chips for AI, legacy chips made in region may not see exemption

- Bhagyashree Garekar

AUSTIN - Advanced chips used in artificial intelligence (AI) may escape US President Donald Trump's proposed sky-high tariffs, but legacy chips that are made in Singapore and other Southeast Asian countries like Malaysia and the Philippines will likely take a hit.

A lot of questions are up in the air for the semiconductor industry after Mr Trump's sudden announcement of an "approximately 100 per cent" tariff on semiconductors imported into the US.

Tech companies investing in chip manufacturing in the US would, however, be exempt from the duties.

"We'll be putting a tariff of approximately 100 per cent on chips and semiconductors," Mr Trump said during a press conference on Aug 6. "But if you're building in the United States of America, there's no charge."

"If the companies say they are going to build and don't, the tariff will accumulate. You will have to pay it at a later date," he added. "I think the chip companies are all coming back home."

He was speaking alongside Apple chief executive Tim Cook, who pledged to invest an additional US$100 billion (S$129 billion) in manufacturing capabilities in the US, bringing the total investment to US$600 billion in four years.

Mr Trump did not say when the new tariff would take effect or whether only new investments would get exemptions. The White House previously said that the semiconductor tariffs would be unveiled next week.

The announcement of the levy came as Mr Trump's punishing tariffs on more than 90 countries came into effect on Aug 7 at noon, Singapore time.

The exemption would benefit companies like Taiwan Semiconductor Manufacturing Company (TSMC), the world's foremost maker of advanced chips that are essential building blocks in America's AI race with China.