How Trump Policies Could Disrupt Automotive Semiconductor Markets

A Trump presidency introduces critical risks for the automotive semiconductor market, including a potential decline in electric vehicle (EV) adoption and economic fallout from tariffs. These impacts could reshape semiconductor demand in the auto industry and beyond.

President Trump’s skepticism toward EVs and potential rollback of EV incentives are likely to curb U.S. sales. However, the global impact may remain limited as the U.S. accounts for a smaller portion of global EV demand. For semiconductors, the shift is significant, as EVs utilize far more semiconductor content than gasoline vehicles. Reduced EV sales could result in substantial losses in semiconductor revenue, especially if buyers shift back to conventional gasoline models.

Trump’s "America First" agenda and proposed tariffs on imports, including EVs, may spark a global trade war. Historical data shows that even modest GDP slowdowns can heavily impact vehicle sales. This potential economic disruption could lead to a measurable decline in global vehicle demand, significantly reducing semiconductor revenues tied to automotive applications.

Tariffs represent a larger immediate threat to semiconductor demand than reduced U.S. EV sales alone. For the automotive industry, lobbying efforts should focus on addressing potential tariff impacts in the short term. In the longer term, weakened climate policies under a second Trump term could also pose risks, with broader economic implications tied to climate change.

While EV adoption in the U.S. might slow, the greater concern lies in potential global economic disruption from tariffs. For the semiconductor industry, proactive strategies will be essential to maintain growth amidst these challenges.