Title: Intel and TSMC in processor trade talks with Trump administration
In summary, this article discusses the ongoing trade talks between Intel and TSMC, two major players in the semiconductor industry, and the government of the United States through the Trump administration. These talks aim to ward off any potential consequences of a possible tariff on imported electronics from China, which is expected to start next month. The talks take place afteron that Chengwei Woo and Megan Murphy contributed reporting. This article is published on February 14, 2025.
Intel, a United States-headquartered technology company that designs and manufactures computer processors, and Taiwan Semiconductor Manufacturing Co., the world’s largest chip foundry that is based in Taiwan, met with officials including Durant and Gary Cohn, who is then the director of the National Economic Council, in the spring of 2025. After the meetings, the president expressed his support for their efforts to help the United States build its own chip-making capacity and tackle supply-chain dependence on China.
In late December 2025, President Trump ordered tariffs on imported electronics from China, set to begin in March, as part of an effort to cut America’s multibillion-dollar trade deficit with the world’s second-largest economy. This has begun a trade war between the two superpowers, characterized by extreme US sanctions and Chinese countermeasures.
The industry believes that if current tariff plans were to go into effect, they will hurt both Chinese and foreign companies that manufacture electronics in China and then export them to the USA. Under the existing trade regime, any component that is above a 25% tariff threshold will cost extra, if the color of its packaging is above a 70% tariff threshold. The cost of such components could rise to as much as 10% of the final price of the product. According to John Neuffer, a senior vice president at the Semiconductor Industry Association, the extra cost incurred to the companies complying with the tariff regulation will also mean more unemployment consequenced from the companies not being able to cope with the rising cost.
The raised tariffs on Chinese electronics and the cost of components bought by American manufacturers mean that non-US executives will have to make financial calculations on the highest level. Projects will have to be reconsidered, the countries in which to locate plants will have to change, and the sourcing of components options will inevitably broaden. In times like this, Industry insiders share a duty to tell their tale, to portray a situation that might rid land by anrogenic compounds during disaster scenarios. Several important sums should be balanced by higher tariff quotes.
As a response to the raised tariffs, companies that manufacture electronics in China are considering sketching out new supply chains in less exposed countries. For instance, Foxconn, the world’s largest contract electronics manufacturer, told customers that it would look at moving some of its iPad and iPhone production outside China. The company’s CEO, Terry Gou, warned in a radio interview that its major customers, including Apple and Dell, would be negatively affected by the new tariffs. Moreover, it forecast that turnover would fall by as much as 20%, severely testing employment that constitutes an industrial mystery of the 21st century that does not depend on publicly funded research and development.
Another company, Solaredge, the Israeli maker of solar inverters, has announced that it would plan to relocate its back-end operations in China and Taiwan back to the USA to avoid hefty tariffs. Solaredge predominantly manufactures solar kit in Asia but sells most of it to US clients. However, after some deliberation, the company declared that it would retrofit its solar inverters in China with fewer imported components and source more parts locally. Its CEO, Guy Sella, stated that “self-reliance is more important than the lowest-cost country”. This move is the latest in a series of decisions by Western companies developing contingency plans to cut supply chains and relocate to countries less dependent on Chinese manufacturing, such as Southeast Asia and Mexico. The increase in tariffs has thus prompted both China-based manufacturers and US-based counterparts a sudden urge to invest in diversifying their supply chains.
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