The semiconductor industry continues to navigate a turbulent year with another major development. President Donald Trump announced on CNBC’s Squawk Box on Tuesday that his administration plans to introduce tariffs on semiconductors and chips as early as next week. However, the details of these tariffs remain unclear.
Such tariffs could significantly disrupt U.S. hardware and AI companies. When the U.S. CHIPs and Science Act was signed in 2022, providing $52 billion in subsidies to boost domestic chip manufacturing, the U.S. produced only about 10% of global chips. Despite this small manufacturing footprint, more than half of global semiconductor companies are headquartered in the U.S.
Progress has been made in expanding domestic chip production since then. Both Intel and Taiwan Semiconductor Manufacturing Company (TSMC) have received funding from the CHIPs Act. TSMC has also pledged to invest at least $100 billion over the next four years in U.S. chip manufacturing plants.
However, establishing new chip facilities takes time. Intel recently announced another delay in constructing its Ohio manufacturing plant, underscoring the challenges of rapidly scaling up production.
The tariff announcement coincides with the industry awaiting the administration’s decision on AI chip export restrictions, which regulate which countries can purchase advanced semiconductors for AI systems. The Trump administration officially rescinded the Biden administration’s AI export rules in May, which had imposed country-specific restrictions based on national security concerns.
In July, the Trump administration released its AI Action Plan, emphasizing the need for chip export restrictions but offering few specifics. According to reports from Semafor, the administration is now reconsidering whether to fully replace Biden’s AI export rules.
For further insights into the semiconductor industry’s eventful year, a regularly updated timeline tracks key developments since the start of 2025.