Under the "hot tariff war," China's Semiconductor Industry Association (CSIA) has issued a new amendment to its chip import policy, exempting tariffs from chips coming in from Taiwan.
China's New Chip Policy Exempts Up To 125% Tariffs On Sourcing From Chipmakers Other Than That In The US
China has made a bold move here to strengthen its domestic supply chain, and the nation's latest move has targeted semiconductor imports. According to an urgent notice issued by CSIA (via Chinese media), it is claimed that the nation will now determine the "country of origin" for chip products, in particular for packaging/unpackaged semiconductors. This means that companies sourcing their chip needs from other US chipmakers are in a great spot here since they will now be exempted from potentially 125% tariffs.
Not only is the new chip policy a move to show China's dominance over the global supply chain, but through this, firms will be more keen on sticking with their production in the nation. Companies like NVIDIA, AMD, Apple, and many more source their semiconductors mainly from Taiwan, and given that there's a 125% tariff exemption on this, it is safe to say that firms won't find it hard to deal with trade uncertainty, especially for their production facilities in China, since the new policy basically makes it much easier for chip procurement.
Another important thing to note is that CSIA's new policy will significantly downplay the importance of US chip companies in global trade, since Chinese firms sourcing chips from American chipmakers might need to reevaluate the supply chain to escape the tariffs. Since the rule is based on the location of the wafer fabrication facility, this essentially puts away all the other firms in the supply chain process and instead directly focuses on the likes of Intel, GlobalFoundries, and many more US-based companies.
The key question here is whether companies will need to decide on "who to choose" when it comes to the supply chain, since China's latest move clearly indicates that they won't let production move away from the nation. Given that the trade situation escalates daily, it is certain that firms like NVIDIA and Apple will need to take a decisive step.
