U.S. semiconductor firms that outsource chip manufacturing to Asian foundries will be exempt from China’s newly announced retaliatory tariffs on American imports, easing industry fears over how the levies would impact the global chip supply chain.
The clarification was issued Friday in an “urgent notice” by the China Semiconductor Industry Association (CSIA) via its official WeChat account.
The CSIA stated that for all integrated circuits — whether packaged or unpackaged — the declared country of origin for import purposes will be determined by the location of the wafer fabrication plant, not where the chip is designed or assembled.
This means that chips designed by U.S. companies such as Qualcomm and AMD but manufactured in Taiwan by TSMC will be classified as Taiwanese products. As a result, they will be exempt from China’s steep new tariffs of up to 125 percent on American goods, according to Chinese semiconductor platform EETop.
However, the exemption will not apply to U.S. chipmakers like Intel, Texas Instruments, Analog Devices (ADI), and ON Semiconductor, which operate fabrication plants in the United States. Their products will be considered U.S.-origin and subject to tariffs of 84 percent or higher, EETop reported.
The announcement follows Beijing’s recent decision to escalate tariffs on U.S. imports in response to President Donald Trump’s move to increase tariffs on Chinese goods to 145 percent.
“The notice from CSIA helps distinguish which U.S. chips will be hit with tariffs,” said He Hui, Semiconductor Research Director at Omdia. “It is clear that some chips made in the US will still be taxed even if they are packaged in China.”
The CSIA's advice helped restore some clarity to the market and helped push Chinese chipmakers' shares higher on Friday. The move highlights Beijing's approach to protecting local chip buyers while still providing a limited answer to U.S. trade moves — action that makes things even more complicated for American chipmakers trying to navigate persistent geopolitical tensions.