The Trump administration is reportedly considering a new ratio-based approach to increase semiconductor production in the United States. This policy would penalize domestic manufacturers with tariffs if they do not produce enough chips domestically.
According to a report from The Wall Street Journal citing anonymous sources, the plan would mandate that US semiconductor companies manufacture the same number of chips in the US as their customers import from overseas manufacturers. Companies failing to meet this one-to-one ratio would face tariffs, though the specific timeline for achieving this goal remains unclear.
President Donald Trump has been discussing tariffs on the semiconductor industry since early August. This proposed ratio-based strategy is an unusual method for achieving the goal of bringing chip manufacturing back to the United States. While it could eventually lead to more domestic production, it also has the potential to harm the US chip industry in the short term until manufacturing capacity can expand to meet the high demand.
Establishing domestic chip manufacturing plants is a significant and time-consuming challenge. For example, Intel’s Ohio plant, which was originally scheduled to open this year, has been delayed multiple times and is now aiming for a launch in 2030.
In a separate development, the Taiwan Semiconductor Manufacturing Company announced in March that it plans to commit one hundred billion dollars over the next four years to build infrastructure for supporting chip production plants in the United States, although the company provided few specific details.