Imagine a startup in Munich waiting on a key batch of microcontrollers…only to face a sudden 100% surcharge. That’s the reality chipmakers worldwide are bracing for after U.S. President Donald Trump announced tariffs doubling costs on non-American semiconductors.
European officials are now racing to protect their firms. With Europe's share of global chip output hovering around 10%, companies rely on imports—especially from Asian giants in the Taiwan region and the Republic of Korea—for 60% of their supply. A doubling of prices threatens to derail ongoing investments and Europe’s goal of digital sovereignty.
Under the EU’s “Chips Act,” Brussels plans to pour around €43 billion into domestic production by 2030. Yet, negotiators worry that without a carve-out or a favourable trade deal in the coming weeks, rising costs could slow the rollout of next-generation 5G gear, artificial intelligence platforms and electric vehicles across the bloc.
“This move could undermine our ability to compete on the global stage,” warns an EU trade official. “We need swift talks with Washington to ensure our companies aren’t left behind.” Next month’s G20 meeting may be the forum where these high-stakes negotiations play out.
Meanwhile, chipmakers in Asia, from foundries in the Taiwan region to fabs in the Republic of Korea, are evaluating price hikes that US customers may absorb. But global market watchers warn that a prolonged trade standoff risks stalling innovation at a time when the world is hungry for more chips—whether powering smartphones, smart cars or cloud-based AI systems.
As the industry braces for impact, one thing is clear: the next chapter in the semiconductor saga will test the balance between trade protectionism and the drive for technological leadership.
Reference(s):
EU, Global chipmakers brace for Trump’s semiconductor tariffs
cgtn.com
