U.S. Polysilicon Tariffs Take Effect, Limited Impact on Taiwan's Chip Supply Chain
Claire Weston
The US imposed a 15% tariff on polysilicon and derivatives with minimum import prices, but Taiwan's cabinet says the hit to its semiconductor industry should be limited — firms with US factory investments can access exemptions that offset most of the cost.
What exactly do these tariffs cover, and how do they work?
The August 6 proclamation invokes Section 232 of the Trade Expansion Act, imposing a 15% tariff on polysilicon and derivatives from December 4, 2026.
Minimum import prices are set across the chain: raw polysilicon at $21/kg, ingots and wafers at $100/kg, solar cells at $0.22/W, modules at $0.38/W.
This means → tariff plus price floor create a double gate: products priced below the floor face an additional duty equal to that floor.
Why is polysilicon being targeted now?
Commerce Department data show the US share of global polysilicon capacity fell from roughly 50% in 2005 to under 2% in 2024.
In plain terms = the US has been almost entirely hollowed out on this link of the chain; the tariff aims to force capacity back onshore.
The move follows the same logic as recent tungsten-scrap export controls — both target China's pricing power in upstream supply chains.
How exposed is Taiwan?
Solar exposure is negligible: Taiwan's solar industry is domestic-demand-driven, with exports accounting for only about 1% of output.
Semiconductor exposure is larger: polysilicon product exports to the US total roughly $320 million, or 25% of Taiwan's global exports in that category; wafer exports reach $252.1 million.
This means → the items to watch are wafers and polysilicon — solar can be set aside.
Can firms with US factories dodge the tariff?
The proclamation states that foreign companies investing in US-based polysilicon or derivative production can apply for Section 232 exemptions scaled to their investment.
Exemptions cover production equipment and target products during the construction period — a material buffer for TSMC and other Taiwan firms already building at scale in the US.
A separate US-Taiwan investment cooperation MOU provides duty-free quotas plus tariff waivers on raw materials and equipment.
What is the real variable for Taiwan's chip chain?
Taiwan's cabinet calls the impact "limited," but that judgment hinges on firms fully utilizing the investment-exemption window.
In plain terms = the tariff itself is not fatal, but how much exemption each company secures will determine its actual cost.
This reflects a broader pattern: Washington is using tariffs plus export controls to reshape supply chains, and the question for Taiwan's chipmakers is no longer "whether to go to the US" but "how much policy space they can trade for once they're there."
Content is for reference only, not financial advice.