Donald Trump’s decision to spare Apple from looming semiconductor tariffs has delighted investors, who see it as a signal that tech firms could avoid the levies if they commit to US investments. But industry insiders warn the reprieve will be limited to companies with Apple’s lobbying clout or the resources to build factories in America.
UBS Asia-Pacific tech research head Nicolas Gaudois said device makers from notebooks to smartphones would need to prove that both they and their suppliers are investing heavily in the US to qualify for an exemption. Smaller vendors unable to show this could face tariffs of up to 100%.
The semiconductor probe — part of the Trump administration’s Section 232 investigations into industries such as cars, steel, and pharmaceuticals — is among the most complex, given chips’ central role in the global economy. The administration’s selective exemptions could quickly shift the competitive landscape.
Trump announced Wednesday that chip tariffs would be “approximately 100%,” excluding companies expanding US production. Apple secured a pass after raising its US investment pledge by $100b to $600b. However, a Japanese chipmaker supplying Apple said hundreds of its own suppliers have “no capacity to go to the US,” adding that state-backed financing favors traditional sectors like steel and shipbuilding.
Smaller chip vendors face steep costs without US production plans
Executives say the administration’s unpredictable, transactional approach to tariffs leaves businesses guessing. Apple’s exemption, for example, includes pledges by its main supplier, Foxconn, and investments in server assembly — not iPhones.
Some exemptions appear straightforward. TSMC is building fabs in Arizona worth $165bn, while Samsung’s Texas investments are seen as large enough to qualify. The US is also striking country-level deals with allies like South Korea , the EU, Taiwan, and Japan to avoid supply shocks, though analysts warn such exclusions may not last. A similar steel exemption granted in 2018 was revoked this year.
Analysts caution that other players — including Micron, UMC, and Vanguard — could face full tariffs unless their home countries secure separate deals. Uncertainty remains over whether the tariffs will apply to the total device cost or just the value of chips made abroad.
The Commerce Department, which can take up to 270 days for a Section 232 probe, now expects to finalize the policy by December. One key question is whether tariffs will extend to chipmaking tools and materials, which critics say would make building US fabs more expensive and undermine Trump’s goal of bringing chip manufacturing back home.
In its May comments to Commerce, Taiwan’s government warned that higher equipment and components costs would directly reduce companies’ willingness to invest in US production.
Apple’s $100 billion pledge fuels stock rally as TSMC sales surge
Apple’s exemption news has fueled a three-day stock rally. The $100 billion investment pledge, announced by CEO Tim Cook alongside Trump at the White House, pushed shares above their 200-day moving average for the first time since March 10, after clearing the 50-day line midweek.
In related news, Apple’s primary chip supplier, Taiwan Semiconductor Manufacturing (TSMC), reported that July sales jumped 22.5% from June and 25.8% year-over-year. Analysts attribute the rise to ramped-up production for Apple’s upcoming iPhone 17 and sustained demand for AI server chips.
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