Overview

• China now determines semiconductor origin based solely on the wafer fabrication location, impacting global supply chains and tariff classifications.
• Chips fabricated in Taiwan, including those from U.S. firms like AMD and Nvidia that outsource to TSMC, are exempt from China's 125% retaliatory tariffs.
• U.S.-made chips from companies like Intel and Texas Instruments face steep tariffs under the new rule, significantly increasing their costs in the Chinese market.
• The policy aims to strengthen China's domestic chipmaking industry while encouraging foreign firms to adopt a 'China for China' production strategy.
• Market reactions have been swift, with shares of U.S.-based chipmakers declining sharply, while companies like TSMC and Chinese foundries saw gains.