Chip stocks climbed on Thursday after President Trump said he’ll exempt companies from his planned semiconductor tariffs if they have committed to making their chips in the US.
“We’ll be putting a tariff of approximately 100% on chips and semiconductors,” Trump said during a press conference at the Oval Office Wednesday afternoon. “But if you’re building in the United States of America, there’s no charge.”
“If you’ve made a commitment to build or if you’re in the process of building, as many are, there is no tariff.”
Leading AI chipmaker Nvidia (NVDA) stock rose as much as 2.5% Thursday to a fresh intraday high of $183.88 before paring gains midday. Shares of rival Advanced Micro Devices rose more than 6%, while Broadcom (AVGO) and Micron (MU) stocks rose 1% and 2%, respectively.
Most of the world’s advanced chips are produced by leading contract chip manufacturer TSMC (TSM) in Taiwan, but the company has been building out its capacity in Arizona with a $165 billion investment, exempting it from Trump’s tariffs. The company’s US-listed shares jumped more than 4% Thursday.
Tech companies have rushed to announce investments in their US manufacturing footprint in the hopes of avoiding Trump’s trade war wrath. So far, Nvidia has committed to producing $500 billion of AI infrastructure in the US. Micron made a similar $200 billion commitment. Texas Instruments (TXN) has said it’s spending $60 billion to bolster its manufacturing capacity in the US.
Citi (C) analyst Christopher Danley said the exemptions mean the semiconductor tariff will have “minimal impact…as US-based semiconductor companies with in-house fabs have operations in the US and fabless companies can commit to using TSMC, Samsung (005930.KS), GFS (GFS) which have operations in the US.”
“Fabs” refer to factories where chips are produced, and “fabless” companies outsource production of their chips to contract manufacturers such as TSMC, Samsung, and GFS. Companies with “in-house fabs” include Intel (INTC), Micron, and Texas Instruments. Nvidia, AMD, Broadcom, and Qualcomm (QCOM) are “fabless.”
Morgan Stanley (MS) analyst Joseph Moore echoed Danley’s sentiment, writing in a note to clients Thursday, “To some degree this outcome would be something of a relief.”
“Yes, 100% tariffs are unpalatable but if companies are given time to restore them, the real tax is just the higher cost of building chips in the United States,” he wrote. “The biggest fear was that such a tariff would be implemented immediately.”
Still, Bernstein analyst Stacy Rasgon noted that there are questions surrounding how the tariffs would be applied, making it hard to determine its impact. He explained that most semiconductors are imported once they’re already inside other products, and the US “does not import a ton of raw chips” — $45 billion in 2024 — and it’s unclear whether duties would just apply to raw semiconductors or also to products containing them.
