<img src='https://news.cgtn.com/news/2025-04-12/China-s-tariff-on-chips-is-not-as-widespread-as-you-might-think-1Cw2GAXqInu/img/79774197a82048ddb0379afbdb4c1e2a/79774197a82048ddb0379afbdb4c1e2a.jpeg' alt='/VCG'
China’s retaliatory tariffs on American imports is limited to chips manufactured in the U.S., while chips made from the country’s Taiwan region and South Korea are not affected, according to a clarification from the China Semiconductor Industry Association (CSIA) on Friday.
CSIA, representing the country’s leading chip companies, stated that the “country of origin” for integrated circuits would be determined by the location of the wafer fabrication facility (fab), not the final packaging or design location.
Chips like AMD CPUs and Nvidia GPUs, manufactured in China’s Taiwan, will not be classified as originating from the U.S., bypassing China’s retaliatory tariffs.
However, chips made in U.S.-based fabs by companies like Intel and Texas Instruments will still face tariffs.
Shares of AMD and Nvidia rose 6 percent and 2.6 percent respectively, while Qualcomm was up 1.1 percent.
Intel meanwhile fell more than 6 percent. The company is one of the largest producers of personal computer chips and the only American semiconductor firm gearing up to manufacture the most advanced processors in the United States.
Beijing on Friday increased its tariffs on U.S. imports to 125 percent, hitting back against U.S. President Donald Trump’s decision to hike duties on Chinese goods to 145 percent.
After CSIA’s clarification, the prospect of high tariffs on U.S.-origin chips led to a surge in Chinese chipmakers’ shares on Friday.
“The notice from CSIA helps distinguish which U.S. chips will be hit with tariffs,” said He Hui, semiconductor research director at tech research company Omdia, “It is clear that some chips made in the U.S. will still be taxed even if they are packaged in China.”
He added that this could benefit China’s domestic chipmaking and its supply chains as foreign semiconductor firms pursue a “China for China” strategy – manufacturing for the Chinese market in China.
Bernstein analysts told Reuters that CSIA’s move was a big surprise to the market as investors generally considered the location of packaging to be the country of origin, not the fab, and it was way more difficult to shift fabs.
(With input from Reuters)
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