Reporter of The Interface News | Li Biao

Editor of The Interface News | Wen Shuqi

"One minute you ask, the next minute it's already increased," said a domestic chip purchaser. After the introduction of US tariff policies, the market has gone into a frenzy of hoarding goods. "

Although the domestic semiconductor industry had expected Trump's tariff policies after he took office, the so-called "reciprocal tariffs" initiated by the US in April have caused the market to experience multiple rounds of shocks. According to the latest executive order issued by the White House on April 9, the reciprocal tariff rate for Chinese products exported to the US has been raised from 84% to 125%, and it has officially taken effect. In response, China's Tariff Commission also announced that as of April 10, the additional tariff rate on all imported American goods will be increased from 34% to 84%.

The impact of the tariffs quickly triggered a chain reaction across various product markets. In the semiconductor market, the "commodity" storage chips, which have a huge annual import and export trade volume, were the first to hear news of price increases.

According to Reuters reports, the US memory chip giant Micron has already notified customers that an additional fee related to tariffs will be levied on some memory products (such as DRAM memory and SSD solid-state drives). The global production base for memory chips is concentrated in Asia, including South Korea, Japan, China, Vietnam, and Southeast Asian countries like Singapore and Malaysia. These nations are currently on the latest US reciprocal tariff list and are being impacted by varying degrees of tariff hikes.

Increased tariffs directly lead to higher chip costs. To maintain profit margins, chip manufacturers often raise chip prices. Customers, worried about future supply shortages and price increases, are now rushing to purchase available stock in the market to control costs.

Three industry insiders from different cities told reporters that not only storage chips but also mainstream chips such as analog chips and automotive power semiconductors are experiencing abnormally hot spot conditions. Due to customer rush-buying, prices are skyrocketing, with "prices changing daily." Domestic agents for Micron, Texas Instruments, and ADI have already stopped quoting prices to clients.

Due to the uncertainty of tariff policies, most spot traders in the market are currently adopting a wait-and-see attitude, while some hope for another "overnight fortune" like the chip shortage and price hike in 2021.

However, the industry feels more confusion brought about by the disruption of normal business operations due to US tariff policies. A chip manufacturer believes that "even if prices increase without demand, it won't help." Unlike the background of the chip shortage in 2021, customers are hoarding goods out of fear of tariff policies. However, the market demand for products such as storage chips and analog chips has remained at a low point over the past three years, lacking real demand. This price surge cannot last long.

As for how to continue business in the future, the industry does not yet have a definite answer.

Several industry insiders introduced that currently, chip products imported domestically from overseas must undergo origin verification. Products originating from the US must be taxed according to new regulations. The manufacturing of chip products mainly consists of three processes: chip design, wafer fabrication, and packaging and testing. According to the latest version of the "Regulations on the Determination of Substantial Transformation under Non-preferential Rules of Origin" released by the General Administration of Customs on April 9, the production locations of wafers and packaging will be included in the origin determination standards. Sources who have undergone customs verification stated that the actual judgment by frontline customs officers may vary.

Currently, regarding the US's multiple rounds of reciprocal tariff policies, China's Foreign Ministry has publicly responded to express its position. Spokesperson Lin Jian believes that the US, driven by self-interest, uses tariffs as a weapon to implement extreme pressure and gain private benefits, seriously infringing upon the legitimate rights and interests of various countries and violating World Trade Organization rules. Regarding the US's repeated escalation of tariff pressures, China firmly opposes and will not accept them. He also stated that if the US genuinely wants to resolve issues through dialogue and negotiation, it should adopt an attitude of equality, respect, and mutual benefit. If the US insists on starting a tariff war or trade war, China will see it through to the end.

Original article: https://www.toutiao.com/article/7491868712698413568/

Disclaimer: This article represents the views of the author alone. Please express your opinion by clicking the "Like/Dislike" button below.