MediaTek braces for Trump's tariffs, runs impact simulations
The CEO of MediaTek, Taiwan's incredibly important chip company, stated on Friday, February 7, that it has been preparing for the possibility of US tariffs on Taiwanese products.
However, MediaTek's boss believes the impact for this year would be "manageable". Taiwan's tech industry, home to the world's largest chipmaker TSMC, is facing uncertainty as US President Donald Trump has hinted at tariffs on imported chips, following his campaign claims that Taiwan has undermined American semiconductor businesses.
Trump recently confirmed plans to impose tariffs on imported chips, pharmaceuticals, and steel, aiming to incentivize US production. The timeline for these tariffs has not yet been disclosed.
During a quarterly earnings call, MediaTek's CEO Rick Tsai acknowledged the unpredictable nature of the situation, stating that the company is simulating potential outcomes but didn't share specific details. While he expressed uncertainty about the longer-term effects, Tsai noted that for 2025, the impact would be manageable, although he emphasized the many variables at play.
Meanwhile, TSMC is considering a drastic price hike of up to 15% on chip production, far exceeding the initial 5% increase. This move is aimed at protecting TSMC from potential losses due to the tariffs, but it will likely cause ripple effects in the consumer market. Goods relying on TSMC chips will see higher prices, as companies may pass on the increased costs to consumers.
Samsung, for example, faces a tough situation with Qualcomm's planned price hikes for its Snapdragon 8 Elite Gen 2, which could lead to more expensive Galaxy phones or cheaper components. TSMC may shift some production to the US or negotiate exemptions, similar to Apple's previous tariff exemptions. Despite these options, price hikes are expected to be implemented, impacting the end consumer.
Yup, get ready for new, higher prices in the near future: but we're already accustomed to it, right? No point of whining about it.
However, MediaTek's boss believes the impact for this year would be "manageable". Taiwan's tech industry, home to the world's largest chipmaker TSMC, is facing uncertainty as US President Donald Trump has hinted at tariffs on imported chips, following his campaign claims that Taiwan has undermined American semiconductor businesses.
During a quarterly earnings call, MediaTek's CEO Rick Tsai acknowledged the unpredictable nature of the situation, stating that the company is simulating potential outcomes but didn't share specific details. While he expressed uncertainty about the longer-term effects, Tsai noted that for 2025, the impact would be manageable, although he emphasized the many variables at play.
In addition to tariff uncertainties, the rise of China's DeepSeek AI startup has added complexity to the tech landscape. DeepSeek's launch, offering cheaper AI models requiring less advanced chips, triggered a global stock market dip on January 27, casting doubt on the West's hefty investments in chipmakers and data centers.
Meanwhile, TSMC is considering a drastic price hike of up to 15% on chip production, far exceeding the initial 5% increase. This move is aimed at protecting TSMC from potential losses due to the tariffs, but it will likely cause ripple effects in the consumer market. Goods relying on TSMC chips will see higher prices, as companies may pass on the increased costs to consumers.
Samsung, for example, faces a tough situation with Qualcomm's planned price hikes for its Snapdragon 8 Elite Gen 2, which could lead to more expensive Galaxy phones or cheaper components. TSMC may shift some production to the US or negotiate exemptions, similar to Apple's previous tariff exemptions. Despite these options, price hikes are expected to be implemented, impacting the end consumer.
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