AltaScient Insights - Semiconductors - Week of August 11, 2025

Highlights:

U.S. Tariffs Reshape Supply Chains

President Trump announced a sweeping 100% tariff on imported semiconductors, with exemptions for companies that commit to manufacturing or investing in the U.S. The policy is designed to accelerate onshoring but will heavily impact the Philippines, Malaysia, and China, which are major hubs for Assembly, Testing, and Packaging (ATP) and outsourced chipmaking. For now, tariffs on Chinese chips specifically have been paused for 90 days, providing temporary relief while negotiations continue. The overall effect is heightened pressure on Asia’s chip ecosystems and new incentives for global firms to deepen U.S. investment.

TSMC’s Record Surge vs. Peer Struggles

TSMC reported a 61% year-on-year surge in profit in Q2 2025, hitting a record high as AI chip demand from Nvidia, Apple, and hyperscalers drove unprecedented capacity utilization. This underscores how advanced foundries are the prime beneficiaries of the AI wave.

By contrast, Samsung’s semiconductor revenue has struggled, particularly in memory chips where oversupply and price softness persist. The divergence highlights the polarization of the sector: AI accelerators and advanced logic thrive, while DRAM and NAND remain in cyclical downturns.

Nvidia & AMD: Partial Return to China

In a surprise turn, Nvidia’s CEO secured approval from President Trump to resume selling select AI chips in China, with AMD expected to receive a similar allowance. While not a full rollback of export controls, the decision permits limited designs such as downgraded H20/HX products to re-enter the Chinese market. This underscores Washington’s balancing act: restricting access to the most advanced architectures while protecting U.S. firms’ revenue streams.

India Steps Onto the Semiconductor Stage

On Independence Day, Prime Minister Narendra Modi announced that the first “Made-in-India” semiconductor chips will hit the market by year-end. With six operational fabs and four newly approved projects, India is accelerating efforts to join the global semiconductor map. While questions remain about competitiveness and scale, the milestone is politically symbolic and could mark the beginning of a gradual supply chain diversification away from East Asia.

Intel at the Center of U.S. Policy

Reports also emerged that the Trump administration is in talks to take a direct stake in Intel. Earlier iterations of the plan even included calls for a CEO change, reflecting how central Intel is to U.S. industrial strategy. Whether this materializes remains to be seen, but the prospect of state involvement signals the high stakes of securing domestic leadership in advanced nodes and ensuring Intel’s turnaround aligns with national priorities.

Outlook: An Industry in Flux

The semiconductor industry remains at the nexus of geopolitics, trade, and technology leadership. Tariffs are redrawing supply chains, AI continues to produce record profits for some while others struggle, and governments are increasingly active—from India’s homegrown push to U.S. intervention in Intel. The next quarter will be critical: whether exemptions expand, how Chinese tariffs evolve, and how firms like Samsung weather demand headwinds will define momentum for the rest of 2025.

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