Republican presidential candidate Donald Trump went after Taiwan Semiconductor Manufacturing Company (NYSE:TSM) for the second time. On the Joe Rogan podcast over the weekend, he accused Taiwan of undermining America’s chip industry.
He criticized the U.S. CHIPS Act and pledged to impose tariffs on Taiwanese chips if he wins the presidency, which could significantly affect Taiwan Semi, a major global chip supplier for companies like Nvidia Corp (NASDAQ:NVDA) and Apple Inc (NASDAQ:AAPL), CNBC reports.
Shares of Taiwan Semiconductor dropped 4.3% on Monday following Trump’s remarks.
Also Read: TSMC Halts Chip Shipments to China’s Sophgo Amid Huawei Connection Investigation
Previously, Trump questioned the U.S. defense commitment to Taiwan, pointing out the absence of a formal defense treaty, unlike agreements with South Korea and Japan.
Nearly every major tech company producing in-house chips, such as Amazon.Com Inc (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, and Microsoft Corp (NASDAQ:MSFT), relies heavily on Taiwan Semiconductor.
UBS analysts told CNBC that Taiwan Semiconductor manufactures over 90% of the world’s advanced chips.
With rising concerns about Taiwan’s geopolitical vulnerability, especially with China, U.S. companies face increasing pressure to build alternative chip production within the U.S.
Taiwan Semiconductor is on the path to receive nearly $7 billion from the U.S. Commerce Department to support its Arizona foundry, with production scaling in 2025.
Trump argued against foreign companies using U.S. government funds for chip plants, calling the CHIPS Act “a bad deal” and criticizing funds allocated to wealthy firms.
Analysts at Mizuho warned CNBC that a Trump victory could hurt Taiwan Semiconductor, while Citi analysts told CNBC tariffs could complicate costs across the chip supply chain.
Tariffs against China, as seen under Trump’s previous term, could prompt China to retaliate, as it did with Micron Technology, Inc (NASDAQ:MU).
Experts caution that even under a Kamala Harris presidency, stringent export controls on China would continue affecting U.S. chip sales; for instance, Nvidia’s revenue from China dropped below 10% due to these restrictions.
Price Action: TSM stock is up 0.91% at $196.44 at the last check on Tuesday.
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