Trump, CHIPS, and Tariffs: How the 2024 U.S. Election Will Reshape the Semiconductor Industry

The 2024 U.S. presidential election marks a critical turning point for the semiconductor industry, with sweeping implications for global supply chains, manufacturing strategies, and consumer costs. Former President Trump’s return to office introduces new uncertainties around trade policies, tariffs, and the future of the CHIPS Act, raising questions about how businesses can adapt to these challenges.

Tariffs have been a cornerstone of U.S.-China trade relations, and Trump’s proposed increases—up to 50% on semiconductor imports and 60% on Chinese goods—threaten to upend established supply chains. While these measures aim to bolster domestic production under the CHIPS Act, they could lead to higher costs for consumers and create new hurdles for manufacturers.

The industry has already begun decoupling from China, with firms shifting assembly and testing operations to Southeast Asia to bypass tariffs. This trend is likely to accelerate, opening doors for outsourced semiconductor assembly and test (OSAT) providers in countries like Vietnam. However, U.S. companies’ dependent on Chinese manufacturing could face significant short-term challenges.

The CHIPS Act remains a crucial factor in determining the industry’s trajectory. Designed to strengthen U.S. semiconductor manufacturing, its future under a Trump administration is uncertain. A rollback of its incentives could weaken domestic competitiveness and jeopardize investments in onshore production, leaving companies vulnerable to intensified global competition.

China’s response to increasing tariffs could further escalate trade tensions, with potential export restrictions on critical minerals. Combined with retaliatory measures from other nations, this could disrupt global markets and intensify pressures on U.S. semiconductor firms.

The semiconductor industry must prepare for a period of turbulence, shaped by shifting policies, trade restrictions, and supply chain realignments. Businesses should closely monitor regulatory changes, diversify manufacturing strategies, and explore stockpiling options to mitigate risks.