The Trump administration has announced plans to impose tariffs of 25% to 100% on chips manufactured in Taiwan. While the goal is to force companies to manufacture chips in the United States, it ignores a critical reality: building new chipmaking facilities would take at least three to four years, even if construction began immediately.
This single decision could increase the cost of computing for the first time in decades, threatening the entire tech industry. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading chipmaker, produces the majority of advanced semiconductors for companies like Apple, Nvidia, and AMD. These tariffs would make chips significantly more expensive, driving up costs for both businesses and consumers. Coupled with sluggish PC sales and many Windows 10 users unwilling to upgrade hardware, this move creates a perfect storm for the industry.
For decades, Moore’s Law has driven falling costs and rising performance in computing, but these tariffs could reverse that trend. Higher costs could slow innovation, delay adoption of emerging technologies like artificial intelligence, and strain relations with Taiwan, a key U.S. ally.
The combination of rising semiconductor costs, slowing PC sales, and consumer reluctance to upgrade hardware could have far-reaching consequences. Manufacturers may scramble to reconfigure supply chains, while consumers and businesses face higher prices for new devices and technology. If the tariffs are implemented, they could reshape the semiconductor market—and upend the global tech industry.
