US chip tariffs are back in the spotlight, but Taiwan Semiconductor Manufacturing Company (TSMC) appears well positioned to weather the storm. Despite widespread concern that Section 232 tariffs could squeeze already-thin semiconductor margins, several factors suggest TSMC’s exposure is limited.
Why TSMC may feel minimal impact
TSMC has raised concerns about potential tariffs on chips, but two dynamics work in its favor. First, the company has steadily expanded its manufacturing footprint in the United States, which could qualify it for exceptions or lessen tariff exposure on certain products. Second, only about 1% of TSMC’s semiconductor output is tied to direct business with US entities, curbing the potential financial impact.
Taiwan’s National Development Council has indicated that US tariffs are unlikely to significantly affect TSMC, citing both the company’s investments in America and the relatively small share of Taiwan-made chips flowing directly into US buyers. More broadly, roughly 75% of Taiwan’s exports are said to be outside the scope of current US tariff measures, with the most impacted categories still concentrated in materials like steel and aluminum.
Section 232 and the semiconductor squeeze
Section 232 tariffs are viewed by many in the industry as particularly challenging for chipmakers. With capital-intensive manufacturing and tight profit margins, added costs can quickly erode earnings. That’s why companies that operate or invest in US-based facilities are trying to stay ahead of potential policy shifts.
Shifting production westward
Taiwan is actively encouraging its tech and semiconductor champions to increase production in the United States to sidestep tariff risk and strengthen supply chain resilience. A growing list of companies—including TSMC, UMC, Foxconn, Quanta, and Wistron—has explored or committed to expanding US operations. This east-to-west shift aligns with policies aimed at boosting domestic manufacturing and securing advanced chip production on American soil.
TSMC’s strategic advantage—and the wildcard
TSMC’s deepening ties to US manufacturing could leave it among the least affected by any chip-focused tariffs under Section 232. The company’s limited direct sales exposure to US entities, combined with high-profile investments in American fabs, provides meaningful insulation.
Still, policy remains a moving target. With trade frameworks evolving and semiconductor security at the center of geopolitical strategy, the outlook can change quickly. For now, TSMC’s diversified approach and onshore expansion put it in a comparatively strong position, even as the broader industry braces for potential cost pressures tied to US chip tariffs.
