In a dramatic move shaking up the global semiconductor landscape, former US President Donald Trump announced a 100% tariff on semiconductors from companies that don’t invest in the United States. The declaration, made at the White House, has already sent shockwaves through Asian chip markets, with investors scrambling to make sense of what this means for the future.
The United States and China have long been at odds in a race to dominate AI and high-tech manufacturing. This latest tariff, however, turns up the heat—not just on China, but on several countries deeply embedded in the chip supply chain, including Malaysia, Taiwan, Japan, and South Korea.
“If you’re building in the United States, there’s no charge,” Trump said plainly, although he gave no timeline for the implementation of the new policy. Still, the implications were immediate and heavy.
Impact Reverberates Across Asia
In Taiwan, shares of TSMC—the world’s largest contract chipmaker and a key supplier to tech giants like Apple and Nvidia—soared nearly 5% after assurances from the government that the company wouldn’t be impacted. Taiwan is already responsible for more than half of global chip production, especially in high-end semiconductors.
Samsung, which is significantly expanding its manufacturing base in the US, saw a 2% gain in Seoul’s markets. But not everyone was celebrating.
Japanese chip stocks took a hit, and in Malaysia, concerns are growing louder.
Malaysia Speaks Out: “We Will Fight for Our Position”
Malaysia’s Trade Minister, Datuk Seri Tengku Zafrul Abdul Aziz, addressed Parliament with a clear message: Malaysia will not sit back quietly. As one of the world’s critical hubs for chip manufacturing—especially in the mid- and lower-end chip segments—Malaysia has too much at stake.
“We will continue to fight for Malaysia,” he said. “Any changes in US policy must be communicated and negotiated in advance. We intend to preserve Malaysia’s role as a strategic partner.”
The warning signs are particularly bright for producers of lower-end chips. Alicia Garcia-Herrero of Natixis warned bluntly, “This kills producers of low-end chips,” including many in Malaysia and China.
The Bigger Picture: Global Security and Industrialization
Experts caution that such tariffs could unintentionally weaken America’s own position. Chiang Min-yen, from the Research Institute for Democracy, Society, and Emerging Technology, warned that undercutting legacy chipmakers could allow Chinese competitors—who often benefit from heavy subsidies—to flood the global market.
“If these US policies slow down production or reduce efficiency, China could end up dominating the legacy chip market,” Chiang said. “And that poses not just economic risks but potential national security threats.”
As the semiconductor world reels from this announcement, one thing is clear: this is more than a trade dispute—it’s a turning point. For Malaysia and others caught in the crossfire, the road ahead will be tough, but the fight has already begun.
