Introduction:
The U.S. government’s decision on whether to impose steep chip tariffs on imported semiconductors could arrive as early as this week. As the public comment window for the Section 232 investigation into semiconductor imports closes on May 7, concerns are mounting that the lack of public opposition may pave the way for tariffs ranging from 25% to 100%.
Industry leaders fear that such a move could shake the global supply chain, disrupt chip manufacturing, and raise costs for American tech firms.
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Quick Overview: What You Need to Know
Deadline Nears: May 7 is the final day for public comment on the Section 232 semiconductor probe.
Few Responses Logged: Only 10 public comments submitted—far fewer than in past investigations like lumber or copper.
High Tariff Risk: Reports suggest the U.S. could impose tariffs between 25% and 100% on chip imports.
Wafer-Out Rule: Tariffs may apply based on where chips are physically made, not just where they are designed.
Global Repercussions: The move could hit Taiwan’s TSMC hard and force supply shifts to South Korea or Japan.
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Background: What is Section 232?
Section 232 of the Trade Expansion Act allows the U.S. Department of Commerce to investigate whether specific imports threaten national security.
The Biden and Trump administrations have used this rule to justify tariffs on products like steel, aluminum, and solar panels.
In April 2025, the Commerce Department expanded the probe to include semiconductors, semiconductor manufacturing equipment (SME), substrates, bare wafers, legacy chips, and advanced microelectronics.
The rationale? Reduce dependency on foreign-made chips and reinforce domestic manufacturing.
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Industry Concern Grows as Deadline Nears
According to the Economic Daily News, the silence during the public comment period could be interpreted by the Trump campaign as a green light to proceed with tariffs.
In past Section 232 cases, industries submitted hundreds of comments. For example, the lumber tariff probe received close to 300 public inputs. In contrast, the semiconductor case has just ten.
Analysts warn this weak response could embolden policymakers to act swiftly—without strong industry resistance.
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Potential Fallout for Chip Giants Like TSMC, Samsung, and Intel
The Commercial Times reports that the tariffs, if based on wafer-out origin, would disproportionately affect Taiwan’s TSMC.
The world’s largest contract chipmaker manufactures chips for major U.S. firms like Apple, AMD, and Nvidia.
If TSMC faces tariffs of up to 100%, American clients may be forced to shift orders to Samsung in South Korea or even Japanese firms. This redirection could strain capacity, delay chip shipments, and raise costs across the board.
U.S.-based production is not immune. TSMC’s Arizona facility has already flagged a 30% price hike to cover rising costs. Samsung, meanwhile, reportedly delayed importing advanced chipmaking tools into its Texas plant due to tariff uncertainty.
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Wider Supply Chain Disruptions Loom
High chip tariffs could undercut U.S. competitiveness. While the tariffs aim to boost local manufacturing, they could backfire by raising costs for domestic players. Supply chains could fragment. Lead times might stretch. And innovation could stall as R&D budgets shrink under the weight of higher production expenses.
The ripple effects would reach far beyond semiconductors—touching everything from smartphones and electric vehicles to defense and aerospace systems.
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Conclusion: Countdown to a Critical Decision
With the comment deadline just days away, all eyes are on Washington. The semiconductor industry, already under pressure from supply chain bottlenecks and geopolitical tensions, now faces the added uncertainty of steep import duties.
Whether these tariffs go into effect or not, the outcome will have long-lasting consequences for global tech and the U.S. chip policy.
For expert guidance on semiconductor challenges, from design to manufacturing, @Techovedas is your trusted partner. Contact us today for tailored technical solutions and support!
