Trump Tariffs Will Make U.S. Chip Manufacturing More Expensive

American chipmakers will soon be forced to pay more for the equipment they use to make chips. New tariffs imposed by U.S. President Donald Trump go into effect on April 9, 2025. Since much of the equipment is purchased overseas, the increased tariffs will make it more expensive, which will increase the cost of chips made in the U.S.

Released in the USA. Image source: Micron

Semiconductors directly imported into the United States are not subject to the new duties. Only industrial equipment for manufacturing chips inside the country will have to pay more. This will, at a minimum, increase the costs of Intel, GlobalFoundries, Samsung Foundry, TSMC and other manufacturers with operating factories in the United States by about 20%. Since these additional costs must be compensated, we can expect an increase in prices for the corresponding products of the above-mentioned and other companies.

Some of the additional costs will be avoided by U.S. companies. Applied Materials, KLA, and Lam Research account for about 50 percent of the U.S. market for specialized chipmaking tools. But the remaining 50 percent of the equipment, made in China, Europe, Japan, South Korea, and Taiwan, will likely come at a higher price. Depending on the country of origin, the tariff increases will range from 20 percent to 32 percent. The expected price increases for U.S.-made chips are unlikely to improve their competitiveness internationally.

The biggest impact on chip production costs in the US will likely come from a 20% tax on lithographic scanners from the Dutch company ASML. These are the most expensive tools, both in the DUV scanner category (193 nm) and in the EUV segment (13.5 nm). Thus, the cost of ASML DUV scanners for US companies could increase from $82.5 million to $99 million, and EUV scanners — depending on the digital aperture — from $235–380 million to $282–456 million, respectively.

Since ASML also makes test and measurement instruments, some of which are assembled in Taiwan and will be subject to a 32 percent tax for U.S. buyers, the costs for U.S. chipmakers will rise across the board. In the future, some of these instruments could be assembled in the U.S. itself, since ASML has assembly facilities in the country, but that won’t solve the problem entirely, at least in the short term. Some specialty equipment is made in South Korea and Japan, and those are also subject to prohibitive tariffs, so there’s no easy way out.

The problem is compounded by the fact that a number of leading chipmakers have already committed to building factories in the U.S., including TSMC and Samsung. The new tariffs are disrupting their production plans, which they are now having to revise. Not only does this make it more difficult to launch new factories, but it also introduces a significant amount of uncertainty into business processes that is unlikely to benefit anyone, including the U.S. economy itself.