President Donald Trump's tariffs on goods made in China have computer manufacturers scrambling to find solutions to avoid them. If a company can't avoid paying the tariffs, electronics such as video game consoles, laptops, and desktops could see prices spike by 40% or more, making them significantly more expensive for consumers.
Taiwan Semiconductor Manufacturing Co. (TSMC) is the manufacturer of processors for many hardware companies, and it's working to avoid dealing with Trump's proposed tariffs on silicon, which have yet to go into effect, although he has doubled the tariffs on Chinese goods to 20% on Tuesday.
TSMC said on Monday it plans to invest an additional $100 million into semiconductor manufacturing in the U.S., focusing on its plant in Phoenix, which would bring the company’s total investment in the country to $165 million. This Arizona plant is reportedly making Apple's A16 processor, the chip used in the company's iPhones and other Apple devices. Companies that manufacture products in the U.S. can avoid tariffs, according to Trump.
During his speech to the joint session of Congress, Trump touted the investment by TSMC. He also took a shot at the 2022 CHIPS and Science Act, signed by former President Joe Biden, which aimed to boost domestic semiconductor manufacturing.
"Your CHIPS Act is a horrible, horrible thing. We give hundreds of billions of dollars and it doesn't mean a thing. They take our money and they don't spend it," Trump said in a speech to Congress. "You should get rid of the CHIPS Act and whatever is left over, Mr. Speaker, you should use it to reduce debt."
Trump didn't provide any details on why he wants to repeal the $280 billion legislation, which already has allocated billions to Intel, Micron, Samsung, and TSMC for manufacturing plants in Arizona, New Mexico, Texas, Oregon, and Ohio.
It appeared, however, Republicans in Congress were caught off guard by the president's remarks on the legislation, as reported by NBC News. So far, there doesn't seem to be a hurry to move along the repeal, according to the report.
The Chips Program Office, the agency handling the doling out of funds, does appear to be in a situation. A small team led by Michael Grimes, a former Morgan Stanley investment banker and ally of Tesla CEO Elon Musk, began purging staff at the office, according to a report from the Financial Times. The team reportedly asked "demeaning" questions to staff and reduced the headcount of the office to 22 employees from the original 150.
Tariffs causing some big moves in tech
Companies such as Apple, Acer, and Lenovo have made strategic changes when dealing with Trump's proposed tariffs, each adopting different approaches to mitigate the potential impact.
For Apple, its plan is to invest $500 million into the U.S. This investment includes more money spent on a campus in Austin and a server factory in Houston for its Apple Intelligence.
Lenovo appeared to be unfazed by the threat of tariffs. CEO Yuanqing Yang said in an earnings call in February that tariffs are nothing new to the hardware company and could be an advantage for it. The company does have several plants in the U.S., which should allow it to avoid tariffs and maintain competitive pricing for its customers.
Acer, on the other hand, already warned customers that it's going to raise prices on its hardware. The company said last month that starting in March, it would raise the price of its Chinese-made goods by 10% to deal with tariffs. It's unclear if the company has decided to raise prices again following Trump’s latest tariff increase.
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