China's latest tariffs on semiconductor imports target U.S.-manufactured chips while sparing those produced in the Taiwan region and South Korea, according to a Friday clarification by the China Semiconductor Industry Association (CSIA). The move underscores Beijing's calibrated response to U.S. trade measures while protecting supply chains critical to global tech industries.
The CSIA confirmed that a chip's "country of origin" will now be determined solely by the location of its wafer fabrication facility—a significant departure from previous interpretations that considered packaging or design locations. This policy shields major products like AMD CPUs and Nvidia GPUs manufactured in the Taiwan region from China's 125% retaliatory tariffs. However, U.S.-made chips from firms like Intel and Texas Instruments will face increased trade barriers.
Market reactions were immediate: AMD and Nvidia shares rose 6% and 2.6% respectively, while Intel—the largest U.S. PC chip producer—saw a 6% drop. Analysts suggest the distinction benefits Chinese chipmakers and foreign firms adopting "China for China" production strategies. "This clarification accelerates localization efforts in semiconductor manufacturing," noted He Hui, semiconductor research director at Omdia.
The tariff adjustments come as Washington and Beijing escalate trade measures, with U.S. duties on Chinese goods rising to 145% this week. Bernstein analysts described the CSIA's wafer-focused criteria as "market-moving,\" noting most investors previously considered packaging locations as the key origin determinant.
