What are semiconductors and why are Trump planning 100% tariff?

US President Donald Trump has said that he plans to introduce 100% tariff on semiconductor imports.

Small chips strengthen a series of various devices and are integral parts of modern technology and global economy.

While some semiconductor growers can be spared from taxes, they can still affect the technical industry and increase the price of some products.

The semiconductor has enabled a group of modern equipment – from smartphones and laptops to video games console, pacemaker and solar panels.

Sometimes microchips or integrated circuits are referred to, they are made of small pieces of raw materials, such as silicon.

The semiconductor, as the name suggests, can partially operate the electricity – in turn between doing this and acting as an insulator.

This allows them to be used as an electronic switch, speaks binary language of 0S and 1s which reduces computing.

The UK, US, Europe and China trust Taiwan a lot for semiconductors.

The country’s Taiwan Semiconductor Manufacturing Company (TSMC) provides more than half of the world supply.

Established as the world’s first foundry in 1987 – dedicated to semi -makers production to device manufacturers – TSMC now makes them for technical veterans like NVIDIA, Apple and Microsoft.

It has also been caught in the so -called “chip wars” between the US and China. Each country has tried to slow down or cut the other’s access to the essential components, materials and parts of the supply chains as they run to develop the best technique.

Samsung Electronics is the largest supplier in South Korea.

With SK HYNix, it has installed the country as one of the world’s largest semiconductor hubs – especially for the supply of memory chips.

One of the main objectives of President Trump’s “mutual” tariff is to encourage firms to manufacture more products in the US during their second term.

In April, White House Tariff smartphones, computers and some other electronic equipmentIncluding 125% levy imposed on sugar imports. The technical industry breathed a sigh of relief.

But in early August, Trump reiterated the plan to impose tariffs on foreign semi -circulars – saying that he would offer 100% tax on chips from abroad.

He did not give much information on the tariff, but said that companies can avoid them by investing in America.

The country is already home to some companies that design, manufacture and sell processing chips such as Intel and Texas Instruments.

But it wants to be home for more manufacturers, especially the most advanced and in -demand products – many of which are located in Asia.

The presidents and members of his administration have also cited national security concerns about microchips, which are produced or citrus from elsewhere.

In principle, a wide range of passers will be affected by Trump’s risk and technical companies that are dependent on them for semiconductors – most given are mostly based outside the US.

Its effect can be seen as a delay, as companies run to move manufacturing in the US, or some electronics price increases – if manufacturers look at consumers to pass the cost of tariffs.

But Trump’s warning that companies committed to manufacturing in the US will not have to face levy, which means that the largest semiconductor firms can avoid Tram’s tariff.

The President said that Apple, which is the source of its semiconductor from TSMC, will be saved from 100% tariff After investing $ 100BN ahead of this in American manufacturing,

This increased the price of TSMC by 5% on Thursday.

Meanwhile South Korean officials have said Samsung and SK Hinix will not face 100% tariff Due to their investment in new US chip fabrication plants.

America has spent Money -money To try and promote domestic technology in recent years.

Some semiconductor companies, such as TSMC, have already promoted their American presence in response to the law under previous administration.

The US Chips Act encouraged firms to transfer chips manufacturing to the US in exchange for the Funding Awards.

The US government made TSMC $ 6.6BN (£ 5BN) at the awards after setting up a factory in Arizona.

But production on site Have faced the first delay Due to lack of skilled workers – something that can present a wide challenge to increase US -based semiconductor manufacturing.

TSMC Allegedly Only brought thousands of workers from Taiwan to solve the shortage of their employees.