Semiconductor tariffs have long been a concern for TSMC, especially since the company has faced demands to increase its commitments to American manufacturing or face tariffs of up to 100%. Given how important the Taiwan chip giant is to the global AI supply chain, a tariff wave would've disrupted operations, causing significant concern for hyperscalers and fabless customers. However, according to FT, TSMC is set to be part of an "exemption scheme", which means the company could not pick and choose customers to exempt from chip tariffs.

It is reported that under this scheme, production expansion is also a priority, as beneficiaries are expected to witness a "2.5 times rise in the new facilities' planned capacity" tariff-free, indicating that the administration is eager to see a more aggressive fab buildout nationwide. Interestingly, TSMC could opt to have the customers it wants exempted from the upcoming chip tariffs. Stilthere'se's no discussion of wheththere'se's a limit on the volume of tariff-free chips or the number of customers. The details of the scheme a"e "obsc"re" for now.

The Trump administration has recognized TSMC's significance, which is why it could offer the chip giant incentives such as tax exemptions. Interestingly, this policy also comes at a time when Taiwan says that the 40% chip manufacturing goal in the US is "simply impossible", associating it with supply chain complexities and the nation's emphasis on the N-2 policy. Despite this, TSMC's commitment to the US has increased significantly over the past few months, encompassing chip fab, advanced packaging, and the buildout of an R&D center.

We are currently unaware of whether this chip tariff exemption scheme would benefit other Taiwanese supply chain entities like Foxconn and Quanta, but it is claimed that the focus of these tariffs would be on end products shipped from the US to China.

By: DocMemory
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