The Donald Trump administration is considering options to significantly reduce the United States' dependence on imported semiconductors by increasing local production.
The Donald Trump administration is considering options to significantly reduce the US's dependence on imported semiconductors by increasing domestic production, the Wall Street Journal reported on Friday.
The White House is considering a policy that would require chipmakers to produce the same amount of chips in the US as their customers import from abroad, the WSJ reported, citing sources familiar with the matter.
Companies that fail to comply with the 1:1 ratio would be subject to tariffs, the WSJ reports.
The plan is largely consistent with Trump's efforts to stimulate domestic manufacturing in the US: last month, the president imposed a 100% tariff on all chip imports, exempting companies with US manufacturing.
Commerce Secretary Howard Lutnick discussed the idea with chip company executives, the WSJ reports.
However, it remains unclear how Trump will achieve this goal, given the logistics and cost mechanics of producing chips abroad. Foreign-made chips are generally much cheaper than domestically produced ones due to lower raw material and labor costs, and building the necessary chip production infrastructure is also labor- and capital-intensive.
TSMC, the world's largest contract chipmaker, has allocated nearly $200 billion to increase chip production in the US, with the company's Arizona plant scheduled to begin production in late 2024. However, this plant produces only a small fraction of TSMC's total output.
Trump is trying to support American chipmakers: earlier this year, his administration acquired a 10% stake in the struggling Intel Corporation.