Randy Abrams
Appearances
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
They are the largest outsourced semiconductor manufacturer, really for a lot of the major chip companies, NVIDIA, Qualcomm, Broadcom, Apple. And for that, they set the stage for how the outlook is. We've seen in recent weeks, Trump has postponed some of the reciprocal tariffs. And he's also on some of these tech products in the last week. also put them on hold.
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
Now he's indicated that could come back, that the reciprocal tariffs in 90 days may come back. And also some of these tech semiconductor and hardware tariffs could come back on.
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
So the message for the supply chain is to continue to order components, to continue to build products, and essentially make their deliveries with that uncertainty, whether the tariff they're going to be paying in the future in a couple months may be higher. So to that extent, I think TSMC's main message is, hey, our orders have not really changed. We still see good strength.
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
They guided a strong second quarter. They did put an important caveat that they need to come back to us in three months as we get closer to second half to see what is just what tariffs come back on. And by that point, do we have any sign of some moderation?
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
TSMC really was on the front foot or the gas on. to engage Trump to say, look, how can we do more? Part of it because I think their customers are feeling a bit more of the pressure to have more of a U.S.-based supply chain. So that is encouraging TSMC to go a bit faster into Arizona. So they're doing what they can.
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
Now, I'll say their hope, I think, for doing that is, can this help mitigate some of the tariffs? Now, that comes back to the government side. The government with key players in Taiwan, where TSMC is included,
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
are trying to go to us with negotiation leverage and it's what can we bring to us in the nvidia press release it really telegraphed that spill which is now tied to ase the biggest packager in taiwan is part of that us investment that was kind of a new announcement new investment that we hadn't heard about before and then on the hardware and assembly you're starting to see in the releases more of the comments about hanhai like foxconn hanhai which
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
seven, eight years ago talked about Wisconsin and doing production. Well, now those facilities start to come back in to do server assembly. Others like Quan and Wistron also talk about server assembly in the US.
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
So that's what I'd kind of say what Taiwan will try to do more of to mitigate their level of reciprocal tariff or semiconductor tariff is offer what type of business arrangements we can do to help the US reshore some of the supply chain.
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
If it's semiconductors alone, that's actually somewhat manageable. And reason for that, Taiwan last year exported about 37 billion, which sounds like a big number, 37 billion of chips. But if you were to actually take into account all the production coming out of TSMC, from Micron, from UMC, it's about $250 billion worth of chips. So it's only about 15% of chips ship as a raw semiconductor.
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
the bigger risk would be all of these tech products, whether it's a chip or it's the hardware, whether it's a notebook or a server or a smartphone, as a bundle, we're going to put a tech tariff on. So do we get a, like the reciprocal tariff, a tech tariff where US says, hey, you have to reshore. I don't care if it's a chip or the hardware.
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
I'm going to put a, say, call it 25% tariff on no matter where it ships from on a tech product. That would be the type of scenario that ends up a bigger outcome for the supply chain. So I'd say chips alone, somewhat manageable.
WSJ What’s News
The Uncertain Road Ahead for Chip Makers
If it's chips plus hardware, I think then you're going to see the supply chain try to negotiate areas of relief to at least mitigate how much impact it could have on demand.