US Trade Representative: Chip Tariffs Won't Be Implemented Soon, Timing More Important Than Speed

Reuters reported on May 22 that US Trade Representative Greer, while attending the expansion event at Micron Technology's Virginia factory, clearly stated: "We are not going to impose tariffs right away." He emphasized that any tariff measures targeting the semiconductor industry must rely on the national security investigation under section 232 of the US Trade Representative's Office, and be advanced according to the principle of "right timing, right amount".

Greer also signaled a transition period, stating that the government wants to avoid immediate taxation on semiconductor companies that are returning to the US, and will allow these companies to import a certain amount of chips during the "reflow phase". This means that for companies like TSMC and Samsung, which have already built factories in the US or plan to expand production, the near-term pressure on import costs will be lower than previously expected by the market.

The background of this statement is the severe deficiency of US chip self-sufficiency. The Trump administration disclosed in January that the US currently can only produce about 10% of the chips needed, highly dependent on overseas supply chains. Greer frankly said that the offshore production of semiconductors has lasted for decades, and the supply chain is extremely complex. Hastily imposing taxes may harm the reflow process that is being promoted.

About the event, Micron Technology announced the start of 1-alpha DRAM wafer production in Manassas, Virginia, which is currently the most advanced memory chip manufactured in the mainland United States. Micron committed last June to increase investments in the US by 30 billion US dollars, and the cumulative investment scale will reach 200 billion US dollars. In the end of 2024, it received nearly 6.2 billion US dollars in subsidies from the Biden administration, which is one of the largest single government allocations so far under the CHIPS and Science Act.

For the market, Greer's statement temporarily eased concerns about the impact of tariffs on chip stocks, but once the conclusion of the section 232 investigation is reached and the direction of taxation has not changed, the window of policy uncertainty for the industry has not been closed.